Hi, I was hoping to get some responses back before answering. Normally when this kind of behavior is present it is due to a dog believing they are the boss of the house. These dogs are often allowed on furniture and don't like people doing things she doesn't approve of such as touching their people. They will also try and scare people to keep them away but with smaller dogs like yours, it is frequently displayed as they leave since it is easier for them to chase them away when they are already on their way up and they can go after them from behind.
It is fixable, but it will take work on your part and cooperation from the family.You need to obedience train her. You can start training at home but it should be formal as far as a set time and length of training.
The following site is helpful in helping owners train their dog. Be sure and click on the link to the page on obedience at the bottom. and links on subsequent pages leading to detailed instructions.
Training works best if you train at least 30 minutes a day (two 15 minute sessions). I would start making your dog work via the Nothing in life is free program (NILF). It is outlined below.
You should also have her off your furniture until at least you are back in control and she isn't trying to nip people. Once she is obeying commands you can start having her sit and stay when visitors leave and even have them toss her a small treat if she stays where you told her to. At first, go ahead and keep a leash on her and slip it under your foot so she can not break her sit to go after them. the leash can be used to remove her from the furniture as well.
These things should help the situation.
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Since there have been recalls on certain foods, please check the following site to be sure the food your animals eat is not affected. If it is affected, contact your vet as soon as possible. Have your dog seen if they have any symptoms.