If you cast Remove Fear or Resist Fear, your party shouldn't panic. Also if you have Mazzy in your party, she has this as a special ability.
I use the summoned monsters just to get blasted away. If you move your fighters in soon after, you should be able to do some damage before they get blown. Also try summoning some elementals. They are much stronger than most summoned creatures.
Be sure to cast Magic Resistance and Lower Reistance before trying to cast spells at a dragon. If you only use Lower Resistance, plan on casting it a couple of times before casting spells. Ranged weapons (especially bows) won't work very well, so you are better off using a good sword or other melee weapon.
There are lots of other posts that go into more detailed strategies and you might search for those, but I hope this gets you off to a start.
Good luck,
Father Bronze
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