According to the write-up in the DS9 Companion, the script for Homefront/Paradise Lost (and the general theme of "everyone's paranoid about the shapeshifters") wasn't especially inspired by any real-world event, but rather was an attempt to draw the audience into a relatively complex plot in which we, the viewer, choose security over freedom and are then force-fed the consequences of that choice.
The episode actually went through a number of revisions, including one in which Vulcan was considering withdrawing from the Federation before finally resolving on a plot that was very similar to, and largely inspired by the film & book "Seven Days in May", in which a number of US general plot a coup against a President they see as excessively pacifist.
"We always try to make the two-parters as rich as possible, in terms
of characters and storylines," says Behr. And the storyline was
rich, nothing less than "an attempt to make the audience complicit in
believing that a threat is imminent, and that by any means necessary,
it must be dealt with," says Rene Echevarria. "We go out of Part 1
saying, There's going to be a big battle, and we're going to stop
them. Martial law— yes! Clamp down on rights—yes! Blood tests—yes! No
civil rights—yes!' And then in Part II we find out that the real point
of the story is how dangerous this feeling is." "The moral motto of
the whole story is that paranoia is ultimately the end," adds Wolfe.
"There are only four Founders on Earth, but whatever they're doing,
we're doing more damage to ourselves than they are."
Although the paranoia theme was inherent to all versions of the plot,
one of the earliest versions discussed during third season had an
even more complex political plot, according to Ron Moore, who wrote
the story for Part II. "The changelings come to Earth, infiltrate the
populace, and cause near civil war within the Federation," he relates.
"We were going to have Vulcan start to break away from the Federation
as a result of what was going on on Earth, and a confrontation in
Earth's orbit where a Federation starship is about to fire on a Vulcan
transport." Moore notes, "We realized that the whole thing with the
Vulcans wasn't quite selling it. So we started talking about a
military coup of the Federation by Starfleet, a la Seven Days in May,"
he says, referring to the 1964 film about a military scheme to
overthrow the U.S. government. "We thought that was actually more
interesting, and more unexpected in the Star Trek universe—that
Starfleet would take over the government out of fear and paranoia.
What the fear of the other, of an enemy, could drive even Starfleet to
do." Drawing the audience into that paranoia was definitely part of
the plan. Indeed, it was essential to selling the story. "We wanted to
make people think we were doing a different story," says Wolfe. "The
whole thing is a total misdirection. Part I is a total misdirection of