For liberals, he is terrifying because he's tapped into the disaffected white working class that they ignore, though there have been twice as many working whites as those of other races for 50 years. He's tapping into the socially conservative labor union members once called Reagan Democrats.
For Republican party leaders, he is terrifying in that he is tapping into the base. For too long, Republican leaders said what is good for big business is good for the country. Outsourcing of factories costing jobs, bringing in legal immigrants via HB-1 and tolerating illegal immigrants have caused wages for the bottom half of the population to stagnate for 20 years. When you have workforce participation rates at what they were in the 70s, about 10% who had jobs a decade ago now unemployed while most new jobs have gone to immigrants, you have a lot of people who have thus seen their household wages drop and government leaders who slap them with a racist label if they complain about the root causes.
So Trump has tapped into the small business owners and working class, as well as many middle class, voters on the Republican side. He says build a wall, and everyone who lost a job to an immigrant or was told we don't have funding for more honors classes because we have to meet bilingual needs or can't find a service provider who speaks English cheers.
For the Republican leaders freaking out over Trump, they ignore the fact that he has a good chance at winning - because they will lose control of the party. And for Republican leaders, it is worse to lose control of the party than to lose yet another election to the Democrats.