Being shy means feeling nervous or uncomfortable around other people, often because you don't like being the center of attention.
When we say someone's shy, it usually means they get quiet and awkward when they have to talk to a lot of people at once. They might avoid eye contact or not want to be in big groups, even if they're really nice one-on-one. It's like their personality gets hidden behind a layer of shyness when there are too many other people around. But that doesn't mean they're not friendly or interesting - it just takes them a little while to warm up and feel comfortable.
How common is "shy"?
Word shy is considered uncommon in modern English. It has a balanced usage among all categories: speech, fiction, newspapers and academic texts.
Definitions
adjective
Easily frightened; timid.
Reserved; disinclined to familiar approach.
Example: He is very shy with strangers.
Cautious; wary; suspicious.
(informal) Short, insufficient or less than.
Example: By our count your shipment came up two shy of the bill of lading amount.
Embarrassed.
(UK, US, politics, of a voter) Less likely to reveal whom they will vote for than average, chiefly in the context of the collective effect this has on polling accuracy.
Example: Pollsters need to remember the shy Tory factor.