M.L.
As the old Sesame Street song says, "Everyone feels a little shy sometimes." Your daughter may indeed grow out of this. Sometimes it's just a matter of growing up a bit more, or sometimes it's part of someone's personality.
Some children (and some adults!) are always much more comfortable being in small groups, or even alone. They are uncomfortable with strangers, crowds, and staring relatives.
However, usually we cannot choose our environments. We are always needing to meet strangers and be in large groups from time to time. So we all have to learn how to manage it.
For what it's worth, one of my very best friends has a daughter who was very timid as a child. She didn't grow out of it. My friend told her, "It's all right to be quiet and not noisy - but you must treat other people well, too." She taught her daughter at first to look at someone and say, "Hello," while still staying by Mama's side. Then the girl practiced answering questions such as, "How old are you?", "Would you like some ice cream?", and "What do you want to be when you grow up?" - you know, just typical conversational questions. She practiced smiling at the relatives even if she couldn't manage to go over to them. My friend and her daughter visited friendly neighbors and the friendliest of the relatives to practice on. They practiced until the little girl could give answers automatically without having to think too much about it. As she grew more able to give answers without being overly conscious of herself, she became more confident about doing other things, too. My friend's little girl is now a wife and mother, certainly with a quiet side but able to handle herself well in public, and even to speak before large groups (some natural extroverts can't do *that* well!).
Please don't talk about your child's shyness to your family members or to others. Even to explain, "She's shy," tells her there's something about her that others object to and that even Mama doesn't care for. If you treat the situation as if it's not a worry to you, your daughter might catch a little of your positive attitude.