Answer:
Brom uses fear to manipulate Crane by telling him stories about a headless horseman because deep down, he knew that Crane was stronger, quicker and a better match for Katrina, so he resorted to the only place he could win, the mind, with fear.
This has made the town people to be afraid because of. The stories they've heard about the headless horseman who comes at night to look for his head.
