My german shepard puppy

Question
I adopted Sunny from the pound in January. She was only 8 weeks old. The second we brought her home, she tried to hide behind anything she could find. After 4 months, she is still the same. She is scared of everything, never barks, and won't go anywhere but the couch and her room. She wont go outside to use the bathroom, and when she gets nervous, she pees and poops all over the floor (even when nobody is talking to her). She wont go near the leash, and she doesnt do anything you could consider phyisical activity or play, unless she's laying down (and then she only chews on a rope). She paces in and out of her room. When we call her, she looks at us, and then runs the other way!! This is only the surface of her personality. I love her, and wont get rid of her, but cleaning pee and poop pads 3-4 times a day is not practical either. I just need to know how to go about getting her over her fears. We have been overly sweet (and understanding if I do say so myself) but it doesnt seem to work!?!  My fiance thinks she might be mentally retarded; is that possible?

Answer
No she's not mentally retarted. She is unsocialized. She doesn't know how to respond. She was most likely poorly socialized if at all prior to you getting her. Here's a website that will explain to you what has happened and why. Read it completely. Since she is only four or five months old, you should be able to fix this but you must start immediately.
http://www.dog-obedience-training-review.com/puppy-socialization.html
Go back to what it says to do with your new eight week old puppy and start there. Get her out and about.Get her involved in obedience class and puppy socialization. Get her LEASH trained as a good beginning. WOrk with her at least thirty minutes morning and night on ONE new command. Use lots of praise and rewards, ignore the failures. NO disciplinary behavior or action toward her at all right now.  Everything needs to be positive. EXCEPT for praising her for fearful behavior. Do not, if she hides behind things or appears fearful say oh it's ok baby and pet her. To her she is hearing you reaffirm that she is doing the right thing. She doesn't understand reassurance. only praise and lack of it. To her you are praising her for being fearful. Praise her for being calm, reward her good responses. I truly do not believe it is too late for her. She's still very young. Though you've missed a good many milestones, let's hope that reentering that phase will help her out.
Do not make eye contact with her, this will make her feel threatened, do not 'hug'her, this is abnormal behavior for a dog and will make her feel confined and threatened. Introduce everything to her that you can. Let her see, her , taste and feel as many new experiences, gently as you can AFTER she is leash trained. Take her EVERYWHERE. Always carry treats and encourage strangers to give her treats and pet her UNDER her chin or scratch her chest. Refrain from the top of the head petting that almost NO dog likes. Anything coming down on top of them feels like predatory, aggressive behavior. Approach her at her level. on the floor, eyes averted hand outstretched palm DOWN. Start with just allowing her to sniff you while talking softly to her, and hopefully giving her a treat. Gradually build up to scratching her under the chin and eventually to her coming to her name. Repeat and repeat and repeat. This is going I truly think she will come along more quickly than might imagine. Patience, persistence and consistency are the keys to making this work.
Here's another website that provides a very helpful checklist for socializing your baby. Once she is leash trained , you should start on it asap.
http://www.pets.ca/articles/article-dogsocial.htm
Good luck and please come back from time to time and give me updates.Plus do feel free to ask any further questions at any time
blessings,
Cindi