If your dog is constantly licking, biting and chewing herself or pulling her fur out, the first thing to do is visit your veterinarian. These are often signs of health conditions that need medical attention. Pain and discomfort from more serious problems, as well as from minor skin conditions, can cause a dog to chew herself, so please, do not try to diagnose the problem yourself. See your veterinarian.
Usually when the ailment troubling your dog goes away, so does the self mutilating behavior. Sometimes the behavior continues as a habit even though the health problem is long gone. One trick is to give your dog something especially yummy to chew on beside herself - but not as a reward for chewing on herself. Give her the chewy before she starts chewing on herself. Personally, I smear a little peanut butter inside a Kong toy, just out of reach inside the kong. My dogs will spend hours trying to lick it out. If the dog is trying to get peanut butter out of a kong toy, she cannot at the same time be chewing herself.
Many dogs have excess nervous energy and no where to vent the stress, so they develop a habit or pastime of licking themselves raw. Other dogs actually learn this behavior because their owners make such a fuss over them whenever they indulge in such activities. It doesn't take long for Rover to realize this is quick and easy way to gain instant attention and affection. For example: "Oh Rover, you poor, poor thing, what's wrong with your little paws? Are they itchy or sore? Oh you poor baby." Pat, pat, stroke, stroke, etc. It doesn't take long for Rover to realize this is a quick and easy way to gain instant attention and affection.
The key to stopping this self mutilation habit is distraction - giving the dog something else to do and not unintentionally rewarding the dog. First, be sure to provide your dog with plenty of opportunity to run, play, exercise and vent her energy. A well exercised, trained and happy dog is not likely to have to relieve stress or entertain herself by self mutilation.
Whenever the dog begins to lick or chew herself, try making a very short, sharp, loud sound just enough to startle the dog into stopping and looking around to see what happened. After the dog has stopped for some period of time, just a few minutes or several seconds, depending on how severe the problem is then call her over to play a game, do some training or even get a massage. Reward her for other behavior rather than inadvertently rewarding her for chewing herself.
Realize that this habit is often just as hard for a dog to stop as it is for humans to stop habits such as fingernail biting or cigarette smoking, so please be patient and keep trying.