A smear test can spot abnormal cells, but further tests (like colposcopies) are needed to see whether the cause is something like HPV or cervical cancer or something more easily treated, like cervicitis (cervical inflammation).
I don't think the doctors "misdiagnosed" you or deliberately tried to scare you - if you have abnormal results on a smear test, then they do have to check it out, because some of the time, it's not going to be a false alarm.
It's better to get your pap smears done so that any abnormal cells can be checked out, than to risk letting something like cervical cancer go untreated.
By the way, condom use will reduce your risk of HPV transmission, but it can't prevent it completely - HPV can be transmitted through skin-to-skin contact, and obviously condoms don't cover the entire genital area.
STI File: Human Papilloma Virus (HPV, Warts)