“fear.” Although the Hebrew word for “fear” has a wide semantic range and can mean “respect” or “awe,” and those meanings apply in this verse to some degree, even that respect is based in healthy fear. Here in Psalm 2, the context of “fear” is God’s fearsome power and God’s judgment of His enemies, and that God is not to be trifled with. For more on “fear” and fearing God, see commentary on Proverbs 1:7.
“trembling.” Although some commentators assert that the “trembling” in this verse is trembling with joy and excitement at serving God, that does not fit with the context. “Fear” and “trembling” are healthy responses to being close to the Most High God. But they do not refer to the torturous kind of fear and trembling, such as being “frozen” with fear; in this context they refer to the healthy kind of fear and trembling that accompany the realization of the power and authority of God, and accompany the realization that we are His created beings and He expects certain things from us, such as love and obedience.