"Wig out" and "wig" sound related because they both use the same word, but they do not always mean the same thing. One belongs to older slang about losing control. The other became internet and pop-culture slang for being amazed, impressed, or emotionally blown away.
To "wig out" means to lose your composure, panic, melt down, or freak out. If someone says, "I wigged out when I saw the bill," they mean they reacted strongly. Merriam-Webster defines the verb "wig" in slang as losing one's composure or reason, usually in the phrase "wig out."
This version is casual and a little retro. You might hear it in conversation, comedy, or older pop-culture writing. It can mean fear, anger, stress, or shock depending on the sentence.

In internet slang, especially language influenced by drag, ballroom, stan culture, and Black queer online spaces, "wig" can mean something was so good, shocking, or exciting that it metaphorically snatched your wig off. It is close to "I am shook," "that performance destroyed me," or "she ate."
That is the meaning Katy Perry was playing with on American Idol when contestant Noah Davis used "wig" as a one-word reaction. Perry later explained the idea as someone singing so well that the wig flies off. The joke works because Perry herself has worn many wigs, and because the phrase was already circulating online.
If the phrase is "wig out," the meaning is usually negative or stressful: panic, freak out, lose it.
If the word is just "wig," "wig snatched," "wig flew," or "wig gone," the meaning is usually praise or shock: amazing, stunning, unbelievable.
Compare these:
"I wigged out before the interview." I panicked.
"Her high note? Wig." Her singing was so good it stunned me.
"Do not wig out." Stay calm.
"Wig officially gone." I am impressed or overwhelmed.
You can, but context matters. "Wig out" is widely understood casual English. The newer "wig" slang is more culturally specific and can sound dated or forced if you use it without understanding the tone. It belongs more naturally in playful reactions to music, fashion, drag, beauty, or performance.
Bottom line: "wig out" means to freak out. "Wig," in the Katy Perry/American Idol sense, means a performance was so good or shocking that your imaginary wig flew off.
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