Not knowing what to say or what to do around other people is pretty common, really. Everyone seems to have this need to feel "normal" and to fit in. Sometimes, when you are anxious and self-conscious you may not realize that other people go through this same thing. Not all people are called to be the life of the party, so if you are more at ease quietly interacting with people, there's nothing wrong with that.
Think about why you are anxious around people. The next time you feel your stomach knot up, stop and take a second to find out why. That may help you find ways to counter-act the feeling. Take a deep breath and clear your mind and relax.
Relationships can be built. Start with your closest relatives: mom, dad, or sister. You don't have to talk about your feelings about socializing, but spend some time talking about anything. Talking takes practice.
Also, unless you have a horn on your head or a tail or great purple polka dots on your skin, try to recognize that you are a human like all other humans and therefore just as valuable and normal as any other human. How you feel is the right way to feel because you feel it. If you don't like your feelings, change them. It sounds a bit silly, but it really is that simple. Perhaps not that easy, but simple.
Well, it could be SAnD.
It's characterised by high levels of anxiety and fear in social situations.
To quote the DMS-IV: Generalised Social Anxiety Disorder is a social anxiety disorder that typically involves a persistent, intense and chronic fear of being judged by others and/or of being embarrassed or humiliated by one's actions.
The individual fears that he or she will act in a way (or show anxiety symptoms) that will be embarrassing and humiliating.
The person recognizes that this fear is unreasonable or excessive.
The feared situations are avoided or else are endured with intense anxiety and distress.
The avoidance, anxious anticipation, or distress in the feared social or performance situation(s) interferes significantly with the person's normal routine, occupational (academic) functioning, or social activities or relationships, or there is marked distress about having the phobia.
Exposure to the feared situation almost invariably provokes anxiety, which may take the form of a situationally bound or situationally pre-disposed Panic Attack.
My nephew has SAnD, he can only be sociable around family and very close friends otherwise he's always scared to go out, and he's always clearly distressed when he's forced to enter conversation with someone he doesn't know eg. at the till in the supermarket.
He's very nervous and when he hears people laughing he always jumps to the conslusion they're laughing at him and he gets upset.
If you think that any of points of the DSM-IV criteria resonate with you, then I'd see a proffesional. Sorry if I haven't been any help, I just thought i'd tell you what I thought. :-)