Acharya Prashant explains that fear is fundamentally rooted in one's relationship with the external world and others. Using the example of an audience member hesitant to ask a question, he points out that fear does not exist when one is alone; it only arises in the presence of others. This occurs because individuals are dependent on the opinions of others to form their own self-image. When a person looks at themselves through the eyes of others, they become vulnerable to the risk of being judged or rejected, which would cause their self-image to suffer.