Proper socialization needs to occur early in life.  A dog matures many times faster than a human.  Even large breed dogs reach mental and physical maturity around four years old (even though it may seem like a lifetime).  Humans would never expect a four year old child to comprehend adult concepts. 

	However, just because your dog is older, that does not mean that it cannot socialize.  I've taken in rescue dogs who have never been outside of a kennel for the first six years of their lives.  Many dogs like that CAN and will learn socialization later in life and function normally.
	However, puppies who leave the litter too young also have issues.  This is the stereotypical underage pet store puppy (some I've seen sold as young as 5 weeks old).  These dogs are taken from their mothers as newborns and have never learned important things such as bite inhibition or play behaviors.  These dogs are at a severe disadvantage - in physical and mental development.

Proper socialization takes work.  Allowing your puppy to play with your other dog is NOT socialization.  Ask any teenager if he/she considers spending time with siblings as a fun Friday night activity.  You will need to take your dog out to appropriate events, activities, and environments.  It may interfere with your weekend snoozes.  You might even come home with another dog's slobber.  And you may even meet other dog owners. 

Proper socialization entails your dog interacting with other dogs and people outside of your family.  This doesn't mean you let your dog loose at the dog park to get bullied or to bully other dogs.  This means a positive social interaction in which you teach your dog proper behaviors.  this means if your dog is a little shy or reserved, you reward it when it has a positive interaction with another dog or human. You can use treats, praise, and petting.  This also means that if your dog reacts inappropriately (i.e. lunges at passing pedestrian), you ought to correct that behavior too.  Please see a professional trainer for help. 

Extreme Fear and Shyness  - This is very common.  I've heard so many times from new dog owners, "We think Muffy was abused because she's scared of *insert object/person/dog*."  The fact of the matter is that it is probably more often due to lack of socialization.  Dogs fear the unfamiliar.  It's fight or flight, and most choose flight first.  Think about it.  If you were in a new environment with another organism that had you on a leash and didn't speak your language, you'd probably be  little scared too.  We can't very well tell the dog that we're it's new loving owners and that the leash was for safety.  They just don't speak English, nor do they have any desire to learn English.  We need to learn their language.  

Genetic Aside - Some dogs are just shy and reserved.  That is their genetic temperament.  I've known many dogs raised as newborns who were always afraid of men (very common) or objects.  These dogs had never had a negative experience with men in their lives.  That's just the way they are.  There are perfectly normal reserved human beings, and there are perfectly normal reserved dogs.

Lack of Social Behavior - These are the dogs you see that don't quite know what to do.  They approach other dogs; then they have that weird "I don't understand" look.  And they truly don't understand.  The dogs look anxious and antsy.  Another dog that play bows sends it into a nervous frenzy.  Imagine if you went to a remote tribe in the Sahara dessert.  Chances are they won't interpret a thumbs up the same way Americans do.  They just haven't learned what body language means. 

Aggression - This can stem from a number of things.  Dogs may not understand how to give off proper "backing off" or "calming signals" when challenged.  They may feel threatened when other dogs just want to play.  They may be a bully.  Or they may be lashing out of fear.  See a professional trainer for help.