Terrified of Playing People

For most of us, chess performance is an up-and-down process. I'll play seven or eight games at the 2000 level, and then go on a blunder binge and ruin my rating.
The best advice I've heard is to set practice goals and enjoy playing. This is simple enough, but not easy -- because our self-esteem is linked to wins and rating points.
I'd add that chess improvement only happens through sustained practice at a high level of concentration. The way most people "train" is as a sort of multi-tasking. They have music playing, email open, the television on, etc. This just does not work.
You might find Jacob Aagaard's book Thinking Inside the Box useful for cultivating the right mindset for competitive chess. Good luck!
Yes, pretty much an up-and-down process. It's best NOT to set ELO goals, but set training goals, practice goals, analysis etc. As non-pro players, I think it is important to enjoy playing the game like we would any video game or other board game. You wanna win but if the game is going to hurt you for losing, it's best to take a break.

My biggest improvements have not come from playing games, but rather following the lessons and reflecting on the insights they contain.

Unless something insane happens, your improvement is going to be slow. That's how most things work. No one becomes good at chess overnight.
I've had many occasions where I thought I wouldn't be able to get any better and got quite discouraged as a result, only to realize how wrong I was when I hit an unexpected breakthrough. Of course, I'm still far from the best player you'll ever see, and I also suffer from moments where playing against a real person seems incredibly daunting. But I'm better at chess than I was a year ago. And that should be your real goal — if you can confidently say that the current version of you could easily beat last year's version of you at a game of chess without issue, then you're doing something right.
Whenever you feel ready, just go for it. I would recommend using long time controls (20-30 minutes with a decent increment is probably ideal) so you can really think about what you're doing.
The main thing to remember is that you're not always going to play really well. Everyone has bad days. But as long as you can confidently say you're better than you were a month or two ago, you are definitely succeeding.

Improvement will be slow and very hit-or-miss if you rely only on playing games.
To improve at a decent pace, you should try using several different learning channels, not just one.
Play some games at whatever time control you enjoy. At your level, your most valuable resource for self-improvement isn't your calculation ability or your strategic intuition... it's your enjoyment of the game. If you stop enjoying chess, you'll have little impetus to improve. Play things you enjoy.
For best improvement, play a Rapid game or two every day. That gives you time to look around the board and get your bearings before trying to decide on a move.
After each game, look it over. Review it first without any computer assistance. You aren't trying to teach the computer how to play better chess.
Practice a few tactics. Study a few model mates. Review games by the old masters, like Morphy, Steinitz, Reti or Alekhine.

Come on, you are a man .Act as one. Men dont get stuck because they ara scared or have anxiety, we just go trough it.

torqued456 --
Maybe go over to Rapid from Blitz. (I notice you haven't played at the former time control in a few years.) At least you'll have a little time to think, rather than relying on intuition and reflexes.
Also, drill tactics over and over again. Use Chessable's free "On the Attack" series.
But mostly importantly, avoid dwelling on your rating and wins/losses.

Play from presence, not from a fear-based identity. Let the act of playing be enough — improvement will come as a byproduct of peace, not anxiety.

You’re definitely not the only one feeling this. That fear of “what if I try and still don’t get better?” hits hard, especially when you care about something.
The thing is, progress isn’t always obvious. Sometimes it feels like you’re stuck, but under the surface, you're still learning. Your brain’s making connections, even if your rating doesn’t show it yet. Everyone goes through those plateaus.
Try not to focus too much on winning or improving fast. Instead, look for the small wins: understanding something new, spotting a mistake you used to miss, or just enjoying a good game. That’s progress too.
And yeah, competition can feel scary when you tie your self-worth to it. But you're not your rating or your rank. Break the chains and have fun!

So i've entered this period of my life where I'm terrified of competition. It started about 6 months ago with Counter Strike and now it extends to chess. I can deal with failure but what cripples me is the fear of the inability to appreciably improve. Has anyone else experienced this?
yea I think i understand correct me if im wrong. Especially because you mentioned that it began in another game. You probably experienced a prolongued period of time in CS where your performance didn't match your expectations (as it used to be before) so you kind of wired yourself to play in harmony with your expectations and continue a cycle of competition-improvement that for some reason/s became unsubstainable to the point of almost breaking the self confidence needed to continue it. And since some of this confidence was gained from winning more than losing, you can't feed yourself with it past a certain level where the losing streaks just break your cycle. Thats why you may have switched to chess, seeking to continue that cycle. And you became so subconsciously aware of it that now every game feels like a lot at stake, and, the more you are aware of it the more it may feel like it, with every new game
So i've entered this period of my life where I'm terrified of competition. It started about 6 months ago with Counter Strike and now it extends to chess. I can deal with failure but what cripples me is the fear of the inability to appreciably improve. Has anyone else experienced this?