When is trauma 'terror?'

"A gunman is holding up to 50 people hostage at a cafe in Martin Place in Sydney. At least one offender took hostages at the popular Lindt chocolate cafe, which has several entrances, just before 10am. Some members of staff could be seen wearing their shop aprons and standing with their hands up at the windows. There is also a black and white flag being held up in a window. It is [believed to be] the Black Standard, a jihadist flag. The incident has not been branded a terrorist attack yet, but police have confirmed they have “moved to a footing consistent with a terrorism event” in their response.
NSW Police Commissioner Andrew Scipione told reporters this afternoon it remained a hostage situation “but we are ready to escalate if we need to”. They did not have “direct contact” with the hostage-taker." (news.com.au)

This took place on the morning when further terrorist activities and raids happened in Beecroft in Sydney's northwest. This morning a Sydney man was taken into custody on suspicion of terrorism-related offences after a morning raid from counter-terrorism units of the Australian Federal Police and NSW Police. AFP confirmed a 25-year-old Beecroft man was arrested by the NSW Joint Counter Terrorism Team (JCTT) as part of continuing investigations into the planning of a terrorist attack on Australian soil and the facilitation of travel of Australian citizens to Syria to engage in armed combat.

Are these two episodes related? We will soon find out. So when is a terrorist action titled 'terrorism?'

Certainly there is plenty of trauma happening in the CBD just now and for the last 8 hours. And people who think "Lindt chocolates" will remember the episode of this morning for years to come. So with the Islamic flag and the hostility, why are we afraid or reluctant to title this 'terror?'
Time will tell, but I think the counter-terror squad ought to be brought in. We are praying for the government, the mayor, the prime minister, the police, and all in authority. We also are watching our back in Bondi. You never know.