This song sounds to me like they are romanticizing fear and panic, but i am not able to understand the actual meaning behind it. Or is it just about an acid trip?
It's about space, plain and simple. It's literally just a description of space - its colors, planets, stars, supernovas scaring Dan Dare.
It's typical Barrett - something very, very simple wrapped in fantastical storytelling. That aspect of his songwriting really didn't change much in the 'aftertime'. Though his depression is showing through, the tunes on 'The Madcap Laughs' are pretty much the same light-hearted prose as his Pink Floyd tunes. ("Doller Rocker. It's an old make of dress. Well, months old, you know, that sort of thing")
Astronomy Domine was written in fall of 1966. It was not, as I had previously thought, one of Syd's pre-written numbers. This is when Syd was living in the attic of 2 Earlham shortly before he moved to 101 Cromwell, where the bulk of Syd's mental decline occurred. According to John Cavanagh's Piper at the Gates of Dawn 33 1/3 book:
[Peter] Jenner recalls an Observer's Book of Planets, which Syd carried around with him and consulted whilst writing 'Astronomy Domine'
Syd had certainly been exposed to LSD by this point, but whether 'Astronomy Domine' was LSD inspired, only Syd could've told us.