My cat started this when she was upset about my other cat
invading her territory. When I removed the source of anxiety
she stopped.

Try getting a Feliway diffuser (or two depending on size of your house).
Have there been *any* changes coinciding with when this began??

My mom has a cat who will overnight lick herself raw.  She is on prednisone
when it's get this bad and on occasion she's been on valium to help with her
nerves.  Could it be something has upset her routine that has caused stress.

Celeste

Andy and Fizz,
My cat Shamrock has had the same problem ever since he adopted me 3
years ago. He came to me with skin so bad that the rescue group was
convinced he'd been in fights, but when they never cleared up it
became apparent that it was self-inflicted. First they thought
fleas, but no flea dirt, no sign of fleas in the house. Checked for
fleas every time he was at the vet. He also had his skin scraped
for mites, cultured for ringworm, a short dietary elimination
program to try to determine food allergy (but he wouldn't eat the
diets tried for more than a couple of weeks) and after all this
time and it still flairs up every couple of months, the vet has
concluded EGC (Eosinophilic Granuloma Complex) by elimination of
other causes. Treatment for him is a Depo Medrol shot (steroid) as
needed every couple of months, and as much as once a month when it
gets really bad. Yes, there are potential side-effects, but nothing
else works. I feel that quality of life in Shamrock's case would be
compromised if I or the vet were to NOT give the shot just because
it MIGHT cause a problem. I still believe it is dietary in nature,
or possibly a combination of allergens that make it worse at some
times, and lesser-so at others. But his problem is not seasonal as
I've seen in other animals. He gets very mean and grumpy, too, when
it gets bad, so I don't make him suffer, and bring him to the vet
for a shot. I'd get mean if I had what he has, too.

The collar might work.  You could have a vicious circle going where
the cat licks the area which irritates it which stimulates the cat to
lick more.  Maybe breaking the circle for a while will let the irritated
skin heal and you will have no more problems.  I had a cat with an injured
tail that wouldn't heal because he kept biting it.  We put an elizabethan
collar on him and he did fine.  Cats have to lick, so he industriously
licked the inside of the collar while he had it.  The main thing with
the collar is to make sure the cat can drink while wearing it.

Hopefully there isn't another environmental cause, as when the cat
develops sensitivity to carpet or whatever after years of no reaction.
The same thing happens to people sometimes.

Sometimes you have to medicate the cat (for eczema, etc.).

Have you considered "contact allergy"?  What kind of carpet, or pillow,
or chair (etc) does the cat lie on?  Just a thought.   MLB