In the spirit of "got to start somewhere":

Sheep wander the world eating. Sometimes, for no obvious reason, they will panic and run around for a while, and then calm down and start eating again. Sheep that are eating mostly stay still, but will absently move forwards now and then. Sheep that are panicking move much faster, and occasionally change direction. Sheep will try to avoid obstacles, and will stop moving (even if they are panicking) if they don't have anywhere to go.

Sheep can perceve other nearby sheep, and will tend to panic if a neighbour is panicking (with the chance increasing as the panicking sheep is closer). However, once a sheep starts to panic, it pays much less attention to it's neighbours.