My husband and I have a four year old yorkie. Due to my husband's health problems, I am now the only person in our family that walks the dog. Our dog, Toby, loves people but recently he has developed real issues with many of the other dogs in the neighborhood. He seems innocent and friendly enough as we walk and approach another dog (tail wagging, etc.), and will even lay down as the other dog comes toward him. But just when the other dog is close enough, Toby will lunge at him and even try to snap at the other dog. To sum up the picture, he just temporarily loses it! I have tried different training techniques (without much long-term success), but I am still left wondering if this is his being aggressive or is it really fear? Again, this behavior is not directed at all dogs. Also, there may have been some of this when my husband was able to walk him but never to the degree it is now. I would appreciate input as to how to correctly handle this.
I think its sounds like he is fearful and trying to show the other dog that he is "big". My dog Maggie does a similar thing with some dogs. I think its fine to realize that they don't have to like every dog they meet. If your walks are like ours, you probably see the same dogs often. I would encourage your dog to be social with the dogs you know he likes, and I wouldn't stop for other dogs. Just say, "we're walking" and keep on going without stopping to let the dogs sniff. Don't let him lay down. If he does, I would pick him up and keep going until you have passed the other dog.
Also, be sure that you aren't putting any extra pull on his leash when another dog approaches. Dogs can sense our hesitation and act out because of it. Don't let him realize that you are worried about "how he will act". If he thinks you are scared then you will project that to him.
Its great that you are walking your dog every day. I think that is the most important thing dog owners can do to have happy, well-adjusted dogs. Good Luck.