If your dog becomes nervous and is afraid of walking in town, this is what happens to dogs when they beome a popular breed. It is not your fault that your dog is so nervous. Don't sympathize with him. Don't stop to encourage him. Just carry straight on regardless. If he tries to sit down, jerk him on quickly; that is if he has a thick-linked choke chain. People will think you are very cruel, but pay no attention to them. By being firm and not giving in to his fears, you are helping him to get over them. Ask people to touch him if they will; if he shrinks away and attempts to bite, muzzle him and still ask people to touch him. While they do so, you must speak to him in a bold voice saying "Talk,", "Good boy." Never let people hold out their hands for him to sniff; this will make a puppy nervous. They should go straight up to him and pat him firmly. An obedience class would help him to mix with other dogs, especially if the trainer will handle him for short spells at a time.
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You can get the vet to give him sedatives, but as their effect is so temporary, they can be of no permanent use. It is much better to firm with him and cure him. When a puppy is nervous within hearing of gunfire or bangs, get a toy gun and fire it often. He will soon take no notice of it. Some puppies are shy of men and not of women. That can only be cured by asking men to take the puppy out for walks; if he enjoys himself, he will soon get over his nerves. Don't bother about Toy Poodles shivering; they often do this purely from nerves. As they get braver, it stops.