Which disorder is characterized by excessive fear of embarrassment while being watched?

The disorder characterized by excessive fear of embarrassment while being watched is social phobia, also known as social anxiety disorder. This condition involves significant anxiety and discomfort in social situations where an individual fears they may be judged or scrutinized by others. Individuals with social phobia are often profoundly concerned about being embarrassed or humiliated, leading them to avoid social interactions or endure them with great distress.

In social phobia, the fear typically centers on the individual's perceived flaws or shortcomings being exposed in front of others, which can significantly hinder their daily functioning and social relationships. This disorder is distinct from panic disorder, which involves sudden and intense episodes of fear, acute stress disorder, which is related to traumatic events, and generalized anxiety disorder, where anxiety is more pervasive and not limited to social contexts. Social phobia's focus on the fear of social scrutiny and embarrassment is what sets it apart as the correct answer in this context.