Governments can arbitrarily label whoever they want as a terrorist for their own political reasons if there is no agreed upon definition of what constitutes a terrorist. Like they are doing now.

Defining Terrorism: Is One Man’s Terrorist Another Man’s Freedom Fighter?

The statement, “One man’s terrorist is another man’s freedom fighter,” has become not only a cliché, but also one of the most difficult obstacles in coping with terrorism. The matter of definition and conceptualization is usually a purely theoretical issue—a mechanism for scholars to work out the appropriate set of parameters for the research they intend to undertake. However, when dealing with terrorism and guerrilla warfare, implications of defining our terms tend to transcend the boundaries of theoretical discussions. In the struggle against terrorism, the problem of definition is a crucial element in the attempt to coordinate international collaboration, based on the currently accepted rules of traditional warefare.
(...)

The struggle to define terrorism is sometimes as hard as the struggle against terrorism itself. The present view, claiming it is unnecessary and well-nigh impossible to agree on an objective definition of terrorism, has long established itself as the “politically correct” one. It is the aim of this paper, however, to demonstrate that an objective, internationally accepted definition of terrorism is a feasible goal, and that an effective struggle against terrorism requires such a definition. The sooner the nations of the world come to this realization, the better.
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thanks to MetaFilter

And how well is our war against terrorism going?

Pentagon split over war plan
Generals at odds with politicians on strategy

The Bush administration is growing increasingly alarmed by the direction of the military campaign in Afghanistan after a week of almost continuous bombing has failed to dislodge either Osama bin Laden or the Taliban leadership.

In the absence of new intelligence on the whereabouts of the Saudi-born extremist accused of masterminding the September 11 terrorist attacks, US generals are under pressure from civilian defence officials to send greater numbers of special forces into Afghanistan to try to accomplish what the bombing failed to do - flush out a target.

But the Pentagon's top brass are reluctant to deploy their best troops in the absence of good intelligence about Bin Laden's whereabouts, and before further bombing has softened expected resistance on the ground.
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Once you start a war, who's in charge?

And once you start limiting freedoms to support the war, who decides which freedoms get limited?

From the United States of America to the National Security States of America

It's official. Tom Ridge has been sworn in as the director of the Office of Homeland Security, as of October 8, 2001. In his acceptance speech, he said, "Although some sacrifices will have to be made, the essential freedoms of the American people will be protected." And this is a very sinister message. What he's saying is that there obviously will be "sacrifices" in the civil rights of the people. And then he's saying the "essential" civil rights of the people will be maintained. But who determines what the word "essential" means? Who determines what "rights" are essential? Certainly the people are not going to determine that. And Ridge didn't say who it was who would be doing the determining. Then Bush spoke for a few more minutes and said that who would be doing the determining would be the "Supreme National Security Council." It will exist above the Homeland Security Directorate, and will be chaired by George Bush, various cabinet members and "certain others who have had long-term political allegiances to my father."

What they're saying is that since this is a super-agency, which is immune from congressional oversight or judicial review, there has to be some regulatory body above it. That will make this Council extra-legal, extra-constitutional, extra-judicial, and extra-legislative. And it's even extra-executive. Bush then is essentially assuming supreme power as Chairman of the Supreme National Security Council.
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Welcome back to the excesses of HUAC - House of UnAmerican Activities Committee. HUAC was small time compared to what Bush and Ridge are planning. It is usefull to look at what damage HUAC did in support of political interests.

The Un-American Activities Committee (HUAC) was originally established in 1937 under the chairmanship of Martin Dies. The main objective of the HUAC was the investigation of un-American and subversive activities.

HUAC and Censorship Changes

HUAC

A Bill Mauldin cartoon probabaly from the 1950s.