The original origin of the term was from a unit of british intelligence during the second world war that ran a radio station broadcast to germany that claimed to be an unofficial, but patriotic, german pirate radio station. It broadcast mostly pro-german news, much as the mainstream stations did – but every now and then dropped a fake news story in – often of the type of “the nazi’s are great but this guy here is incompetant and should be replaced” or “we just lost a big battle (but we’re still going to win of course)”.
The idea was to build an audience and then subtily depress morale and spread false rumours. Studies after the war showed around 10% of the german population listened to it, and all believed it was genuine. One of their big sucesses was broadcasting that potatoes were going to be rationed, that provoked panic buying that actually caused a potato shortage. (There’s nothing new under the sun.)
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