There is a very long history of people accusing marginal groups of practicing religious rites which included ritual murder. It goes back at least to the Roman empire, and continues through the middle ages to the present.

Early Christian groups wrote books in which they defended themselves against accusations which (their books claim) non-Christian Romans were making against the early church (we don't know if these accusations were real, because we don't have records of what non-Christians were actually saying). A common charge Christians defended against was that Christians murdered children and drank their blood or ate their flesh as part of their initiation rituals.

For example, Minucius Felix defends against one accusation that Christians initiate new members into the church by tricking them into killing a baby (the baby is covered in flour, and the new guy is told to stab the flour with a knife, not realizing there's a baby under the flour until it's too late); then they drink the baby's blood, tear its body up, and eat it (presumably, it's covered in flour so they can enjoy their baby with a breaded or batter dipped crust).

Other Christian authors defend against this charge (e.g. Tertualian, Athenagoras).

But Romans didn't just accuse Christians of ritual murders. Sallust (a Roman historian) accuses Cataline (a Roman politician who led an unsuccessful revolt) of initiating new followers to his conspiracy by forcing them to murder innocent civilians. After this, they met in secret and drank human blood in a twisted sacred ritual that bound them together in their evil plot to overthrow the Roman Republic. Or so Sallust claims.

Livy (another Roman historian) accuses members of Dionysus' cult of murdering people (along with having crazy orgies).

So accusations of meeting in secret to practice inappropriate religious rites that involved murder seem to have been something of a Roman trope for marking out a group of people as antisocial or 'bad' (for various reasons).

As Christianity became more mainstream and public, Christians started to adopt a similar suspicion of religious practices that didn't fit the normal, public model. So you start to see Christian leaders accusing groups that don't line up with their values being accused of killing children and having wild sex parties. The language is very similar to that used earlier by the Roman against Christians and other groups that had secret religious meetings. So again, it seems to be a trope, more a way of marking a group as 'bad' by saying they eat babies than an actual statement of fact. These kinds of accusations continue into the middle ages, being leveled against various 'heretical' groups, and against the Jews. To read more about how these accusations of murder followed by cannibalism were used to mark out 'bad' religious groups in the middle ages, see Norman Cohn, Europe’s Inner Demons: The Demonization of Christians in Medieval Christendom (University of Chicago Press: 2000).

So, to go back to your question: stories of Satanists (or Jews, or heretics, or Christians, or Dyonisians, etc) who murder people as part of their secret rituals go back at least as far as the Roman empire. These stories tend to use similar language and similar accusations, which suggests that they're a trope, a set of stock phrases you use to mark a religious group as 'bad', and not a description of real religious rituals. Did any of these groups really kill (and eat) babies? Probably not.

The Satanic Ritual Abuse and satanism scare in the USA (and in Europe, to a lesser degree) was shown to be a moral panic rather than an actual large-scale conspiracy involving the abuse and torture of children. Multiple factors contributed to the spread of this panic, and it became deeply ingrained in US popular culture during the 1980's through the middle 1990's. The genesis of the panic was the book 'Michelle Remembers', published in 1980, an "autobiography" by an alleged survivor of SRA that has since been widely discredited. The spread of this panic was stoked by newly developed therapeutic techniques that "recovered" past memories, leading adults to claim they had experienced SRA in the past, and a growing awareness/interest in prosecuting child abuse in general that led to overzealousness and overconfidence in the coached testimony of young children. Two things abetted all of this... a sensationalizing press (Geraldo's famous TV special with the line "there are over 1,000,000 practicing satanists in the US" is a classic example), and the rise of Christian fundamentalism. The SRA panic led to some really terrible things in the same vein of the 1940s-50s "Red Scare" over communism, including the prosecution of a large number of innocent people and the expenditure of huge sums of money investigating/prosecuting cases with no basis in fact. In the end no conclusive proof was ever discovered that organized satanic murder or abuse cults were extant in the USA. What was seen, though, was that people who were child abusers already started using claims of satanist cults to scare their victims into being quiet. So, of course there are horrible people out there who abuse kids or perform awful murders, but in terms of organized Satanic cults... it does not appear to be a thing. So, that covers the "modern paranoia" aspect.

One thing to note, the infamous "Son of Sam" killer, who murdered numerous people in NYC in the 1970s, has made repeated claims that he was part of a nation-wide satanic cult responsible for far more deaths than those in NYC, and that he did not act alone in even those murders. Some officials in NYC law enforcement considered his claims plausible enough that they reopened the case in the 1990's (others do not consider them plausible at all), but they have never found anything conclusive. Witnesses did see other people at crime scenes, etc. For what it's worth, though, he was making these claims as far back as his arrest... so they predate the satanic panic of the 1980's.

Sources: See JS Victor, "Satanic Panic:The creation of a contemporary legend"; Also, Mary de Young, "The Day Care Ritual Abuse Moral Panic".

Charles Manson combined elements of Satanism as practised by the 'process church' of which he'd been a member with elements of Scientology. But the 'murder cult' he created was didn't exactly have an organised theology - there was elements of doomsday cult, race-war-cult, anarchist-cult etc, so whether you'd call it 'Satanist' I dunno, it was a factor but not necessarily the sole or even the central focus.