What the meaning of: She shied away from it.
I am reading a novel. I cannot find 'shied' in the dictionary. I think it is a past tense form of some verb, but which? The meaning can be concluded from the context, more or less. It would most probably mean: She stayed away from it. She did not do that. In the novel the protagonist is staying away from eating fast food.

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Think of a horse shying - it is usually used for a horse, that suddenly starts away, aside, frightened or startled by something

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You're basically right. It means to stay away from.

It is the past tense of the verb "to shy", which means to move back from. (There are other meanings of the words "shy" and "to shy" as I'm sure you know).

Don't shy away from the dog, it's friendly.
She shied away from all controversy.

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