The first concern is that of out-of-control, self-replicating "nanobots" that would eventually consume and take over the planet in a style reminiscent to that of "The Matrix".
Alvin Toffler and Heidi Toffler in their brilliant book "War and Anti-War: Making Sense of Today's Global Chaos" theorised the creation of insect-sized attack robots, nano-sized robots which would drill into enemy territory, and start self-replicating to a huge extent. These time-controlled robots could then be set to detonate with the press of a button, providing the ultimate weapon against any army in the world.
Conversely, history shows that if advance technologies, developed by the government have the tendency of falling in the wrong hands, be it animate or inanimate being alike. If terrorists were to perfect or get hold of the technology, it would be akin to planting an atomic bomb in every major city in the world.
Even worse, if the time-controlled self-replicating mechanism of the robots were to malfunction in such a way that these robots continued the automated never-ending process of self-replication, it would be akin to planting the trigger of an atomic bomb powerful enough to destroy the world in the hands of a toddler.
The second concern is that nanoparticles if inhaled, could become lodged in the lungs and cause serious health hazards. As their use increases, it is inevitable that such nanoparticles will be released into the environment. These finely divided matter might be intrinsically more toxic, as they would have different properties of matter which are dramatically influenced by size.
For example, asbestos comes in two chemically identical forms - serpentine and chrysolite asbestos. While the former is harmless, the latter contains nano-scale tubes of atoms. Exposure to this tubular form is what killed so man people from lung...