The reason your JSFiddle doesn't work is that you need to wait until the document is loaded before attaching event handlers. Otherwise, jQuery is looking for the submit button before it even exists.
To make sure the button has loaded, use $(document).ready()
:
$(document).ready(function() {
$('#submit').on('click', function() {
if($('#terms').is(':checked')) {
}
else {
alert("To proceed you must accept the terms.")
}
});
});
Note that you already had an extra closing brace and bracket (which was a syntax error), which now closes the $(document).ready
function.