In chapter 1, Jem was dared by Dill to touch the Radley house. Dill and Scout watched as Jem ran quickly to the house and slapped his palm to the wall and ran back. Now that Jem has touched the house and survived, he becomes slightly cocky.
People are scared of Arthur "Boo" Radley for many reasons but for this incident in particular. Arthur apparently got up from his crafts and stabbed Mr. Radley in the leg when he passed. After that Mr. Radley went screaming in the streets saying "Arthur is killing me!" After this is when people started fearing Arthur and the rest of the Radleys.