In Chapter 2, some of the younger boys complain of a "beastie" on the island. Jack claims he will hunt and kill it. Ralph tries to tell them that there is no beastie. He would rather they devote their attention to being rescued. Already, this unknown fear has begun to distract some of the boys from more important things such as building shelters and being rescued.
In Chapter 5, Ralph notices how this unnamed fear is affecting the boys. He says they started out well on the island, but the fear is "breaking" them up. Ralph continues to stress the importance of keeping the fire going so that they can be rescued. Now, the fear is not only a distraction from these responsibilities; it is also something that is "breaking" the boys up:
"We’ve got to talk about this fear and decide there’s nothing in it. I’m frightened myself, sometimes; only that’s nonsense! Like bogies. Then, when we’ve decided, we can start again and be careful about things like the fire."
The boys' fears ultimately divert them into Jack's camp. Ralph is correct. There is no beast. But Jack continues claiming that if there is a beast, he will kill it. In saying this, Jack keeps the very idea of the beast alive. And since he claims he will kill the beast, the boys succumb to their fear and would rather be protected by Jack's violent leadership than by Ralph's logical leadership. (This is a strategy used by dictators and tyrants. They use fear to keep people dependent upon them.)
The climax of the effect of this fear occurs in Chapter 9 when the fear of the beast causes the boys to kill Simon. This is tragically ironic because he was coming to give proof to the boys that the beast is "harmless." It is also Simon who, in a dream-induced state, hears the pig's head tell him that the "beast" (or the fear) is a potential in the boys themselves. By giving in to their fears, they become savage.