A state of high alert, often a simulated panic for comic effect.
It is a nautical phrase that doesn’t originate from the heydays of sail. One of the numerous meanings of the word station is ‘a position assigned to a man on duty’. The Royal Navy had several commands to call sailors to their stations, notably ‘action stations’, which was ordered when a ship came under attack. Oddly, for a term that sounds like an ironic play on words, ‘panic stations’ was an actual command. This is apparent in a report titled Behind the Veil, published in The Times, November 1918:
Alarm gongs had already sent the guns’ crews to their invisible guns and immediately after the explosion ‘Panic stations’ was ordered, followed in due course by ‘Abandon ship’.
Via A Phrase A Week