Selective mutism is considered a "situational anxiety disorder" (although there have been cases where anxiety seemingly isn't present) which can cause people who normally have no problem talking to become mute. Unlike the common misconception about selective mutism suggests, these people don't choose silence, they just can't always talk. There is no one explanation for selective mutism, even people with the condition find it difficult to describe, but it is most commonly associated with anxiety.
Over 90% of people with selective mutism also have symptoms of anxiety and more often than not, it's that anxiety which causes a response similar to stage fright and results in mutism. The pressure of talking/preforming in front of someone causes them to panic and they physically can't bring themselves to go ahead with the performance.
The name is a little misleading, as to "select" is often though of as to "choose," but it actually refers to select situations, select places or select people. It's not uncommon to see it referred to as "Situational Mutism" instead since the term is more understandable for those first hearing about it and it's more widely accepted among those with the condition.
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For the people who are here for the pure facts, here's a summary:
Selective Mutism is a situational anxiety disorder which causes people who are able to talk in some situations to go mute in others. It isn't their choice to remain silent, they physically can't form the words when they're around people/places they're not comfortable with.

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Selective Mutism
NonfiksiWhat is Selective Mutism? What does it mean to live with it? This book is incomplete and unedited. The cover image doesn't belong to me and can be found on devinart by "rottingmute" here: https://www.deviantart.com/rottingmute/art/SELECTIVE-MUTISM-S...