First, "Politics of fear" refers to the way unscrupulous politicians will create or artificially enlarge a potential threat, play up the potential negative consequences of that threat, and then introduce a "solution" to that threat, which really is just a way for them to gain power. The politics of fear can be used to make "nonsense seem common sense", that is, to make people believe that a course of action which is clearly ridiculous is actually a reasonable thing to do.
As a made-up but very plausible pre-WWII Germany example, if you can convince people that Jews currently own large portions of the banking industry, that their ownership is growing, and that they secretly work together to improve their own positions at the expense of the poor, hard-working people who are clients of the banks, then it's "obvious" that something must be done to prevent the Jews from essentially taking over the country; for example, passing laws limiting how much property they are allowed to own, confiscating any "excess", and distributing the confiscated property to "the poor". In the guise of "controlling the Jewish threat", the government is now allowed to arbitrarily seize property from wealthy families, which under normal circumstances people would recognize as a very dangerous and tyrannical power that the government should not be allowed to have.