A frozen shoulder, also known as adhesive capsulitis, is when there is a significant loss of shoulder motion in all directions. Not only is active motion (when the patient moves his/her arm) limited but shoulder motion is also limited passively (when someone else moves the patient's arm). A frozen shoulder can develop when the capsule surrounding the shoulder joint becomes inflamed, scarred, shrunk, or thickened. When the capsule is tight and abnormal, it limits the shoulder motion in all directions. This can happen due to another disease such as diabetes or arthritis in the shoulder as well as a shoulder injury like bursitis or tendinitis.

Source: medicinenet.com