The Spanish Inquisition, for example, was actually largely triggered by wild conspiracy theories jealous native nobility took to spreading about converted Jews in the late Middle Ages. Already successful merchants and businessmen even before conversion, once freed from the legal restraints placed upon them as followers of the Jewish religion, "Conversos" quickly rose to the upper echelons of Spanish society. They also had quite an ego about it, often speaking of themselves as being superior to "gentile" Christians, as they could claim to be of the same race and bloodline as Christ himself.
Native Spaniards and unconverted Jews alike took offense to this, and many began speculating that there might be sinister motivations at play. These rumors gradually gained public notoriety, and eventually made it up to the ear of the king. That was basically "all she wrote."
It was, for all intents and purposes, a Medieval "red scare" brought on by tabloid style-rumor mongering.