The characters combine logically: 恐怖 (terror) acts as a descriptor for the type of 袭击 (surprise attack) it is. It's an attack whose primary purpose is to generate terror.
The term 恐怖袭击 is a modern one, gaining prominence in China with the global rise of terrorism. Its cultural significance is primarily political and social. It is a term of severe condemnation used by the Chinese government and state media to label acts of violence they deem terroristic, both domestically and internationally.
This term is formal and carries immense weight. You will almost exclusively encounter it in formal contexts.