Catastrophizing is an irrational thought a lot of us have in believing that something is far worse than it actually is. Catastrophizing can generally can take two forms. The first of these is making a catastrophe out of a situation... This kind of catastrophizing takes a current situation and gives it a truly negative “spin.”
The second kind of...Catastrophizing occurs when we look to the future and anticipate all the things that are going to go wrong. We then create a reality around those thoughts...Because we believe something will go wrong, we make it go wrong.
In other words, it's the thought process that blows something out of all proportion in your mind until you're thought processes are so consumed by the "disaster" that you cannot think your way through any alternative paths to get to your real desired outcome. I'll give you an example: imagine you're in high school and you want to be a doctor. You get to your final exams, open the chemistry paper and the first question you see is about something you don't know. What do you do? You need to average over 80% in each subject in order to get into med school.
Once the initial panic subsides, you may decide to attempt all the questions you can answer. "Take the easy cans off the shelf, ladies and gents," as one of my lecturers used to say. (Best piece of exam advice I was every given. Thank you, David.). Who knows? You may salvage enough marks by taking this approach. Or you can figure out a different way to get into med school, perhaps by starting a science degree first and transferring...
Or you can burst into tears, run screaming out of the exam and throw everything away. "My life is ruined! I'm useless! I'll never be a doctor! My father will kill me!". Catastrophising? Absolutely. And self destructive, since you've guaranteed that you will definitely fail. And then where will you be? Labelling yourself as a failure forever? (Seriously? This happened. One of my school teachers tried desperately to calm the girl down and quarantine her so that she could sit the exam paper once she was calm. Worse - one friend witnessed a classmate commit suicide in similar circumstances. He stuck pencils up his nose and slammed them down on the desk...).
How do you break the cycle? Psychcentral give some guidance in the link above, but the best advice I've come across was on a blog, here. It boils down to breaking the cycle.