In January 1779, his commander, Dagobert Sigmund von Wurmser advanced into the County of Glatz in five columns, two of which, commanded by Major General Franz Joseph, Count Kinsky, surrounded Habelschwerdt on 17–18 January.
While one column secured the approach, the other, under the leadership of Colonel Pallavicini,[Note 1] stormed the village and captured the Prince of Hessen-Philippsthal and 700 men, three cannon and seven colors.
Terzy, then a major general commanding the remaining two columns, threw back the enemy support and took 300 Prussian prisoners.
[2] During the War of the First Coalition under Prince Josias of Saxe-Coburg-Saalfeld, Terzy was employed in the campaign in 1793 as Feldmarschallieutenant .
In January 1797 he was General of Artillery, and in April, the Emperor appointed him commander of the Austrian troops front; in June he left a part of his troops, under the command of the Johann von Klenau, engage in the Venetian Istria.