Well, I have to say this wasn't exactly what I expected. To be honest, I'm not entirely sure what to make of it. There are a couple really odd stylistic decisions you made that aren't wrong, per se, but they're so unusual that I'm not sure whether they enhance or detract from the story. It's kind of hard to explain. I sort of explained it in my notes, where I could point out specific examples. Let's just get started.

Once upon a time, there was a shy pegasus. She lived in a small town called Ponytown, where nothing particularly interesting ever happened. Her name was Flickerfly. She had a pink pastel coat and a pale yellow mane. Her eyes were pale green. Her cutie mark was three sunset moths. Some ponies thought that she was very pretty, but she didn't think so. She was good at sewing, but didn't sew very much. She usually spent her time with animals, because she liked them. They were easier to talk to than ponies.

There are two main comments I have to make here. First of all, given the later content of this story, beginning the story with a typical fairy tale opening just seems a bit... off. It just seems to mislead the audience a bit. Second, while you're certainly economic in terms of how you're introducing all the information about Flickerfly's personality and appearance, it's also not very engaging. You're basically just listing her attributes. You give a good summary of what she's like, but it's not particularly interesting to read. You might want to think of trimming out some of the unnecessary descriptors. For instance, her eye color isn't particularly important and neither is her sewing ability.

One evening, she was walking through Ponytown. She was going to order a cake. She had a pet rabbit, and his birthday was soon. He wanted a cake, so she was going to order one. She went to the bakery, but it was closed. It was too late. She decided to come back the next day. She was going to go back to her cottage when she heard something. It was a sound from inside the bakery.

There are a few redundancies here. Rather than restating things, you should try to combine them. For instance, you could boil down a few of the sentences into "She was going to order a cake for her pet rabbit, whose birthday was coming up." Or "She heard a sound from inside the bakery." For the most part it's working okay now; just watch the unnecessary repetition.

The sound from inside the bakery sounded like a moan. It sounded like Mrs. Baker was in pain. But at the same time, it sounded like something else. She didn't know what else it sounded like. She wasn't sure whether she should look inside to check. She didn't want to invade their privacy. But maybe she needed help. Maybe she could find out. She went up to the window, behind the bushes. She looked in. She saw Mrs. Baker, and also Mr. Baker. They were doing something very intimate. Flickerfly could see it really clearly. She realized that the sounds Mrs. Baker were making were definitely not pain, even though she was moaning. She was enjoying what her husband was doing to her.

This is going to be one of those stories, isn't it? Also, it's kind of... unusual for this type of story that you're referring to sex so euphemistically. Granted, I'm not sure whether this is actually meant to be arousing or whether it just utilizes sexual content as a plot device, so I'll leave it for now.

Maybe I shouldn't watch this, she thought. But even though she thought that, she kept watching. Seeing them do those things made her feel funny inside. It was a weird feeling, but Flickerfly kind of enjoyed it. She wasn't sure that she liked that she enjoyed it. She kept watching as Mr. and Mrs. Baker kept doing that thing. The longer she watched, the funnier she felt. The funny feeling was mostly in her crotch. She thought to herself that maybe it would feel good if she touched herself down there. She put her hoof between her legs and touched herself. It felt good. It felt sort of tingly and it made her breathe harder. It also made her heartbeat go faster as she touched herself.

Okay, the description of the "feeling" she's getting, which I'm assuming is sexual arousal, is frustratingly vague here. You haven't really described it in any fashion other than that it's "weird" and "feels good". The way you describe it affecting her breathing and heartbeat is good, though it needs to be condensed into one sentence (you still need to watch those redundancies). Also, the extremely oblique way you describe that the Bakers are having sex seems... odd. There's something to be said for not being overly blunt (you don't want to just say "they were having sex"), but you're going a bit too far in the other direction.

She suddenly thought that maybe somepony could see her. She thought that realizing that would make the feeling go away, but it didn't. She thought of what it would be like if one of her friends saw her. Her crotch started to feel even more pleasurable as she thought about it. She imagined one of her friends seeing her touch herself. They would see her staring in the window, watching the Bakers doing private things. They would also see her touching herself. Even if she put her tail over herself, they would be able to see that she was touching herself. They would see that there was a wet patch on her hoof and between her legs. Then she realized that they wouldn't, because she was behind the bush. The feeling went away a little.

She wanted to keep the feeling. She liked having it, even if it made her feel dirty. She took a few steps to the side. She wasn't behind the bush anymore. If somepony walked by, they would be able to see everything. Well, not everything. Her tail was still covering her. She moved her tail to the side. Anypony could see that she was touching herself as she looked into the window. She imagined somepony walking past and seeing her. Her knees began to tremble. If they saw her they might stop and stare. Maybe they would just keep walking. They would talk to somepony else later. They would say that they had seen her touching herself. Or maybe they would stop. They would tell her how she was being a very dirty pony and how she shouldn't touch herself outside where everypony could see her.

Sooo.... an exhibitionist fetish then? Huh, I wouldn't have pegged you as being interested in that, given, well, you know. Then again, I supposed that there is a bit of precedent for this sort of thing. It wouldn't be the first time that somepony began to fetishize something stemming from an aspect of their personality. Given how uncomfortable you are with being the center of attention, it does make some sense that you'd develop an interest in a fetish involving being in a public space but not being seen. And by writing about it rather than taking part in it allows you to avoid the risk of being found out. Well, except by me, obviously. I'm kinda surprised you let me read this. Don't worry, I can keep a secret, though.

She imagined their faces if they saw her. They looked disgusted but also a bit interested. It was weird to think that somepony would be interested in that part of her. The tingly feeling between her legs got stronger as she thought about it. She kept touching herself while thinking about what might happen if somepony saw her. She imagined them staring at her crotch. She thought how they would hear her squeaking as she touched herself and how they could see the wetness on her legs. As she thought about it, the feeling suddenly got really strong. She squealed loudly. Her knees shook and she fell down. She breathed hard as the tingly feeling made her whole body shake.

I'm not sure whether this is intentional or not, but you're really understating the feel of an orgasm. I don't know if it's because you just don't know how to describe it, or whether you just haven't experienced one, but in any case you should probably give a stronger description. (If it's because you haven't ever had an orgasm, well, I won't go into details, but I do think that it's something you should look into) There's no real buildup to it, and you never describe the sensation, even in an indirect sense. You basically just say "it felt the same as before, only more". I realize that describing an orgasm can be tough to do properly, but the current description just doesn't do it justice. Although I think you're on the right track with describing how it affects her. If you can't describe the sensation itself, you can definitely describe her physical reaction. The squeal, weak knees, etc. Work with that.

She looked around. She didn't see anypony. She was relieved, but also a little disappointed. Touching herself had made her feel really good. It felt especially good when she thought that somepony might see her. She decided to go home.

Again, the description here is a little... brief. It feels less like you're describing the events and more like you're summarizing them. There's no detail here. And again, mind the repetition. You don't need to say yet again that masturbating made her feel good. That's kind of the point of masturbation, after all.

As she went home, she began to think about tomorrow. She thought of maybe doing it again. She would go somewhere where other ponies were, and then try to make herself feel good again when they were around. Maybe she would go to a friend's house for lunch. Then she could touch herself under the table while they were talking.

Wait, so does this mean that when we had brunch at Rarity's last week, and you were making those noises... you know what? I don't want to know. That's your own business. Although it does explain that weird wet spot on the chair. I thought maybe somepony had spilled their drink or something. Next time you should- okay, no. I'm not talking about this. Let's go back to the story.

She decided to think about it a bit more while she was at home. She decided she'd have to just bake a cake for her pet rabbit. If she didn't, he would be mad. He needed to have cake for his birthday. She didn't want him to be angry. He wasn't very fun when he was angry.

Okay, this thing with the rabbit is completely unrelated to the rest of the content of the chapter, and you switch back to it so suddenly that it's rather jarring. It's like you started writing a completely non-sexual story about a pony buying a cake for her pet rabbit and then suddenly sex appears.

She wondered if she could get the same tingly feeling by touching herself in her house while her pet rabbit was around. She felt the feeling a little as she thought about it. She would definitely have to try it out.

It's a bit weird to involve the rabbit, but I guess I could kinda see how it might be a decent substitute for other ponies.

I'm really not sure what to make of this story. Aside from the fact that the tone as a whole is really story-bookish, and the sexual aspects come out of nowhere, it's just generally sort of odd. I really don't know whether it's a problem that needs to be addressed, or whether you've actually stumbled across something kinda brilliant.

Basically, throughout the story, you seem to be avoiding describing any of the sexual acts in the story in even the slightest degree of detail. In fact, I don't think you actually ever mention anything sexual directly; everything is extremely vague euphemisms that leave pretty much everything to the imagination. Sex is "doing something intimate", masturbation is "touching herself", genitalia is either "her crotch" or "between her legs"; it's like you're afraid to actually say the words. I get that it might be uncomfortable; talking about private matters like sex is often very awkward, even in a fictional context, but it's something you should work through. You can't really write erotic fiction without including any of the eroticism. I mean, let's face it; your descriptions here are really rather sparse and repetitive. If you want the reader to be aroused at all, you need to bump up the passion a bit. You have a few good bits in there that I mentioned above, but on the whole it's a bit lacking in that regard. Having sexual desires is nothing to be ashamed of, and there's nothing wrong with working through it in this fashion. That said, I'm really quite proud that you were willing to let me take a look at this. Letting somepony else read and criticize your work isn't easy, even when the subject matter isn't so awkward as this.

On the other hoof, if one just reads it as a story that happens to contain sexual elements rather than an attempt at erotica, it actually kinda works. Sure, the repetition is an issue that needs to be addressed, but the extensive use of euphemisms actually works in that regard. If you take the story that way, it's less about trying to arouse the reader and more simply allowing them a glimpse into Flickerfly's thoughts as she discovers something new about herself. In that regard the choice of euphemizing everything could be seen as insight into her characterization; sexuality intimidates her, so she thinks of it in very indirect terms. She's not entirely comfortable with her new fetish and doesn't want to really admit what it is that she's a voyeur and an exhibitionist. Of course, if that's not what you're going for, you definitely need to inject some passion into it.

On a more personal note, if this isn't just purely fictional story, and you really do have these... tendencies, you really need to be careful. You could probably get away with stuff like pleasuring yourself while visiting a friend's house or something; I know a lot of friends would probably find it odd, but would be able to understand (I won't go into detail, but I know for a fact that several of them do in fact have weird fetishes. Not saying who or what, though). However, if you get caught doing that in a public place, like a park or on the street or something, you could get in serious trouble. So you should really be cautious. If you got caught a lot of ponies would find out about it, and I'm sure you don't want that. If this isn't a personal thing and it's purely fiction, well, that's not a problem.

So to recap: combine some of the shorter sentences together to eliminate redundancies, vary the euphemisms a bit more, and may remove them altogether if you want this to be a more erotic story. All things considered, you definitely have something here, and there are several ways you could take it. How much work it needs depends on what kind of story you want it to be. Once you make a decision let me know and we can discuss it further.

P.S. I really am impressed that you were willing to let me read something so personal in nature. Unless you just gave me the wrong thing, in which case our next conversation is going to be rather awkward. Either way, your secret is safe with me.

Author's Note

Doing something a bit different here. I know everybody was expecting a "Fluttershy has a bondage/roleplay/scat/spanking/other freaky thing here fetish", which is why I didn't want to go the shocking route. "Fluttershy has a super-freaky side" is kind of a fandom cliche by this point. It's too easy to go "FLUTTERSHY HAS A SEX DUNGEON LOL". So I decided to give her a more low-key fetish that's actually related more to her personality.

The writing style was even harder to nail down. Eventually I figured that Fluttershy being Fluttershy, she'd be a bit uncomfortable with "mature" subject matter, so I tried to have her dance around the explicit parts. Not sure how well it works; it's definitely not as immediately lol-worthy as the RD or Rarity chapters, but I figure it was worth experimenting on. So yeah, more experimental than the previous chapters. Hopefully it kinda works.