Thanks so much for helping this dog! She deserves all the kindness you can give her for what humans did to her in the past. Fear of the world is a huge burden for a dog to live with, and it's so worth the time and energy to help them shed it. I would bet that you can help her to get past the worst of her fear.
First and foremost, do not "nurture" fear by praising it! By "nurturing" the fear, I mean reassuring the dog by patting it or stroking it when it is cowering or exhibiting signs of fear. It is better to ignore fearful behavior, even though all your kind instincts tell you to cuddle the poor frightened pup. Learn how to use calming body language instead. In addition to the books already recommended, I like Patricia McConnell's The Other End of the Leash.
Praise bravery, and especially praise any demonstrations of curiosity about the outside world.
I've successfully rehabilitated a few rescues who came to me as timid, frightened dogs -- my male, Simon, was the worst, totally shut down (so frightened he pressed himself to the ground, froze and wouldn't look or engage with anything or anyone), terrified of other dogs and people too. When he was pulled by GS rescue from the shelter and got to the house, he had to be dumped out of his crate, as no amount of coaxing, luring or pulling would get him out. When other dogs approached him, he dropped to the ground and shrieked in fear (he had bite marks on his head from his previous owner's other dogs, and had been nearly starved).
Fast forward nine years, and he's a friendly, gregarious, gentle, happy-go-lucky soul who greets humans eagerly as new friends and loves playing at the dog park. So have faith that it possible to transform these psychologically damaged dogs. Just know that it takes a lot of time. Each of them is unique and may require different techniques, but here's what I did to give you some ideas to consider:
1. Once he trusted me enough to play with me, all games we played were about building his confidence. If we played tug, he always won. The first few weeks, I'd even let him tug on a dish rag in my kitchen and praise him for doing it, as it showed courage. (Tugging on the dish rag is obnoxious behavior I would not encourage with any other dog, but with one this timid, he got enthusiastic praise for every bit of bravery he showed in the beginning.)
2. I puppy-played with him on the ground a lot, very gently. During the game, the first few weeks, I sometimes put him on my chest while my back was on the ground, which seemed to really help. (Again, it would be exactly the wrong thing to do with most dogs, but for an ultra-timid dog like him where everything is about rebuilding self-confidence, it helped.) His eyes got wide and you could see the gears turning that I was allowing this and it was okay. To put this in perspective, he was a malnourished yearling--nowhere near his current 90 pounds, but not a wee little puppy either.
3. Novice obedience class is essential--and repeat the class, if necessary. Soon after bringing him home, I took him to his first obedience class -- I think making it an almost instant part of our relationship helped him enormously. He was terrified of other dogs there the first few classes and didn't want to be there, but it was exactly where he needed to be. He quickly realized that he could trust me to keep him safely around other dogs.
Through the class, he eventually understood the world was becoming predictable, and he knew exactly the right thing to do in every situation I presented him with, since the training exercises set him up to succeed every step of the way. Nine years later, I still vividly remember the class day that the "light bulb" went on his head about that--he switched from being afraid of being there to thinking it was a very cool place to be, and something profoundly wonderful started happening with his self-confidence after that. He turned a major corner about month into that course. (I used lots of treats and praise to train him. Painless, non-jerking leash "leash wiggles" to communicate were okay, but I avoided corrections that would undermine his trust in me.)
Your dog desperately needs a positive-method training course (clickers or treats) with a trainer who has patient, nurturing energy. Being around other people and dogs is part of what she needs, so a class environment would be good.
By the end of the course, Simon could do a long (3-minute down-stay) with other dogs and strangers walking all around him to distract him, and he wasn't afraid of them, since I was there. Strangers could approach and touch him during the "stand for examination" exercise. He could walk very close to other dogs when we did leash work in formation. All that was a radical improvement in just a few months--and it showed the power of obedience training to help timid dogs.
4. Frequent, supervised "play care." It's expensive, and not available everywhere, but I had a doggy day care facility owned by a trainer and staffed by people with animal behavior backgrounds who helped match him with other dogs that wouldn't overwhelm him...and eventually he could be matched with even the most high-energy dogs. We boarded there too when we traveled. I know many people think this is a foofy service for little dogs, but my GSDs have all loved going to play care, and for Simon, it was "therapy" for a while...and then it became his favorite place in the world.
I moved now across the country and no longer have that place, but with my new shy rescue pup, who is going through the same gradual rehab process, I found a local vet with a great play care program, and a "socialization field" run by a local trainer that's excellent. Investigate what your local socialization options are -- they'll do this dog a world of good, even if it's only once a week.
For me, dog parks are part of the process too, but they come after play care/socialization field work has already made the dog reliable around other unknown dogs. At play care/socialization field, I know the dogs there have been screened and are there because they have owners deeply committed to canine social skills. Dog parks sometimes have unbalanced dogs and weird owners who aren't interested in correcting sketchy canine behavior, so I want my dogs to have good social skills before we go there, so that I can trust them to deal with unsocialized dogs in a healthy way. There are different opinions on that, and it may also depend on how good the dog park culture is in your city. (My current city's dog park culture is terrible.)
5. As confidence grows and your obedience training takes root, eventually you'll be able to take the dog places and introduce it to people. Eat out at a dog friendly restaurant with a patio. Go buy treats or dog food at your local pet supply together and visit with the staff. Sit together and watch the kids play at a local park. It's all part of learning to see the world as interesting and wonderful, and doing it all with you. Pack your pocket with favorite treats and share them generously on these trips, and effusively praise the behavior you want. (Advise strangers and kids to approach slowly and gently, and ask them to let you introduce them, if it helps your dog accept them.)
I wish you all the best in your journey to help Maddie!