Fear is an affliction; a negative status effect that handicaps the target.
A creature under the effect of Fear is unable to take any action while they are feared, though they can still move. They also can't dodge or parry any physical attacks directed at them while feared. AI-controlled creatures will usually run away while under the effect of Fear.
Fear as spell
Players are able to inflict Fear on a target using the Fear spell from the Defensive Affliction Magic skill. This spell is first available at level 5 magic. Like with all affliction spells, a link must be maintained to keep the target feared.
Players can increase their chances of resisting a Fear Affliction spell by wearing jewelry that raises their Prime Roots resistance.
Enemies using Fear
Since homin mages are capable of casting Fear affliction spells, it may be used against you in PvP. It may also be cast against you in PvE by bandits or tribes guards, who do not need to maintain a link to keep you stunned.
Vorax have a special ability that allows them to induce Fear in their enemies with their roar. This is not a magical effect and thus Prime Roots resistance will not help you resist it. Creatures that are immune to Fear spells similarly are not immune to this effect.
Creatures immune to Fear
Also, all intelligent plants are immune to Fear.
Fear immunity only applies to the Defensive Affliction spell; not to Fear caused by the Vorax special ability.