you lack self confidence, you are afraid of what people around you might say or do and you hide yourself from the potential of being embarrassed or ridiculed. It could be because it's just the way you are, or it could be also because of past or present experiences that are affecting how you view yourself. For me, I had very low self esteem/confidence partly because that was my personality, and partly because my mother was unkind and abusive all throughout my childhood. She belittled me and made me feel horrible about myself and whatever natural tendencies I had to be shy were only compounded by the way she treated me.
Maybe you're afraid of something, of being judged, of whether or not you'll be liked. Try to let go of those negative thoughts and replace them with positive ones; remind yourself that you're a beautiful person, and that the people who matter are the ones who like you for who you are :) Over time, you'll learn to come out of your shell.