Well I'm no expert at all, but I know a lot about lurking on threads about reactive dogs as there are many of them (both reactive dogs and threads about reactive dogs!) So, I won't try to diagnose what's triggered the reactions in your terrier, but I will say that it's manageable, and likely curable.
I don't think my recovering reactive dog has ever bitten another dog properly, but he has bitten me when my leg got between him and a collie he didn't like (totally unintentional, but goodness, the bruising). That marked the low point and it's been a lot of hard work since then. However, it's been rewarding and it's worked. I can now walk my dog in many places (not all) though I am always incredibly vigilant.
Check out the Bastard Dog thread to know you're not alone, look for other threads on here about reactive dogs and wait for the brilliant experts who come on this bit of MN to suggest what you should do next. There is definitely hope