I would say a shy person doesn't fear social situations, but might be at the beginning a bit reserved, needs a bit more time to warm up with foreign people and might be a bit overwhelmed when meeting to much foreign people at once.

Thanks! Do you have any references to back this up?

Well it's just a definition of a word. You could define "shy" to mean anything you like, as long as it works for you.

As far as I can see, the grandparent's definition of shyness matches my experience with shy people very much (and also the depiction of shy people in media that I consume).

The problem is that the word was invented way before we started really talking about social anxiety. It might be the same thing after all, don't you think?

I think it's the difference between having fear of social situations and therefore to avoid them, or to prefer not to be that much in social situations, because they overwhelm you.

There's no sharp definition of both that clearly differentiates them, at the end it's about personal traits that can't be clearly defined like a math equation, but IMHO the key thing for me is, if fear is the determining force and not your free will.

Please don't ask now about the free will. ;)