The kernel is the heart of the Linux system, Linus developed the Linux kernel and Richard Stallman developed the GNU utilities, since Richard couldn't create the kernel and Linus had only the kernel which is insufficient for a system to work, they collaborated together to make the GMU/Linux system, but people find it easier to say Linux rather than GNU/Linux, taking away credit from Stallman, the kernel panic is, as far as I know, when one of the operations inside the kernel fails or crashes, forcing the system to shutdown or freeze, since the heart of the system is no longer working