The killing is believed to have come after a dispute over wages, but members of Terreblanche's Afrikaner Resistance Movement (AWB) say he was hacked to death with machetes in a politically motivated attack.
'Declaration of war'
Andre Visagie, the movement's secretary-general, called the killing "a declaration of war" by blacks against whites and said the AWB would avenge Terreblanche's death.
But he also urged AWB members not to act until after the group had decided its next steps at a meeting on May 1.
"We will decide upon our actions to avenge Mr Terreblanche's death. We will take action and the specific action ... will be decided upon at our conference," Visagie told the AFP news agency.
Terreblanche founded the AWB party in 1972 in opposition to what he regarded as the liberal policies of John Vorster, the then South African leader.
He wanted to create all-white states within South Africa in which blacks would only be allowed as guest workers, and threatened to take the country by force if the white government capitulated to the African National Congress.
After the end of apartheid in 1994, the party played only a marginal role in South African politics, and Terreblanche himself had kept a low public profile since his release in 2004 from prison after serving three years of a five-year term for the attempted murder of a black man.
But the AWB - whose flag resembles the Nazi Swastika - was revived in 2008, although Terreblanche continued to live in relative obscurity.
The killing comes at a time of worries over increasing racial polarisation in South Africa, heightened by a row over the singing of a song by the head of the ruling ANC party's youth league with the lyrics "Kill the Boer".
||Terreblanche was born on a farm in the conservative Transvaal town of Ventersdorp on January 31, 1941
||He founded the AWB alongside six others in 1972 as a shadowy group seeking to protect the rights of the Boers' descendants
||In 1998, Terreblanche accepted "political and moral responsibility" before South Africa's Truth and Reconciliation Commission for a bombing campaign to disrupt the 1994 elections in which 21 people were killed and hundreds injured
The ANC has defended the song as no more than a way to remember a history of oppression, but AWB officials have linked its sentiments to Terreblanche's death.
"That's what this is all about," Visagie said.
Ebrahim Fakir, an African analyst, told Al Jazeera that it is unlikely Terreblanche's political cause will "necessarily die with him".
"It may lose some of its momentum; It may of course lose some of the fiery rhetoric that [Terreblanche] was known for in arguing for Afrikaner rights.
"Whether it loses momentum or not is a moot point, quite simply because it never gathered large amounts of steam in the first place. It didn't have much social support even amongst Afrikaners.
"There is no doubt that Terreblanche's death will exacerbate racial tensions in the immediate area in which he lived," he said."
The Afrikaners are descendants of the Boers, the first whites who arrived in South Africa 300 years ago and avoided assimilation with English-speaking settlers.
Their short-lived republics, in the Orange Free State, Transvaal and northern Natal, were broken up after the 1899-1902 Anglo-Boer War.