DS (4.5) is a very reserved child. He is particularly slow to warm to the elderly (those with white beards simply freak him out). I can recall a time when we were seated at my IL's dinner table just before DS turned 2 (or maybe it was three), and FIL (who has white facial hair usually) raised his voice to my son for tapping his fork on the table like a drum. DH and I were saying something to the effect of, "Yeah, it's like a drum, isn't it?" to DS, but FIL clearly wasn't appreciating the musical talents of his grandson
. After that experience, DS has been fairly guarded around FIL. And, it seems to have spread to most elderly people with white hair.
I think, in general, those older people we know and come into contact with are a bit loud and overbearing at times...comments like, "I'm not gonna bite," and, "You're not gonna give Great Grandma a hug??" coming from a larger and strange face are amazingly intimidating to a little one. I know first hand. I can remember quite vividly some of the scarier faces I came in contact with as a kid (also very reserved then).
DH and I do what we can to help our children feel secure, and not feel ashamed or scared. There have been a couple of overtly awkward situations b/w ourselves and family we weren't comfortable around where we simply ducked out as a family knowing it wouldn't be a safe environment for the kids. Those have been visibly stressful to the kids and we feel badly to have done that to them, but it might have been even more uncomfortable to have stayed and sat through the uneasiness that occurs b/w estranged family.
I think the best we can do as parents is allow our DC to feel what they feel and support and validate those feelings. We never really use the word "shy", though extended family has and DS will use it when he needs to explain why he doesn't want to be somewhere. We tend to spend some extra time with our kids when we first arrive somewhere, talking about how they are feeling, asking if they are ready for mommy and Daddy to leave them with so and so to play, even quietly reminding those we vist (or who visit us) to please allow DS a bit more time before striking up a conversation. It has become a lot less stressful for him as he has developed more confidence in his own social skills (he's 4.5), and he knows it is absolutely fine if he chooses to sit with Daddy or I as long as he needs to to feel safe and comfortable.