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First they noticed the soil had turned. Then it was the water. Then it was the dead walking, the ground slipping away. Then they got afraid. They call it "the panic," I think because it's easier to swallow than facing it head on and calling it what it is: "The Truth."
The Panic was a period of time around 200 years ago when the people of Sangfielle took notice of the illness of the land and fled.
Storms and dust came, the soil turned barren, animals became twisted, the dead walked, reality left. And then the Shape came.
As many people fled as they could. Primarily the wealthy (particularly Aldominans) succeeded in this, often leaving behind the people that they had exploited or enslaved.