Your cat is losing hair, perhaps on her belly or on the inside of her legs. As these are accessible places for a cat who wants to groom she will normally start at these places. Over-groomed, easily accessible places indicate grooming as a de-stresser.
There are two basic reasons why a cat over-grooms (1) her skin is itchy or (2) she is anxious and stressed. The default position is (2) in my view (up to 90% of cases, perhaps).
All over or localised
A basic guide is that if your cat is grooming all over it is likely that she is suffering from an itchy skin whereas if the hair loss is localised as mentioned above then it is probably grooming as a soothing exercise. A third possibility that if your cat is licking in one particular area it may be that that area is painful. This may apply, for instance, if a cat licks her belly because her bladder is painful.
You should take the patient to see a veterinarian to rule out dermatological and other medical issues. The solution might be found in medication prescribed by a veterinarian.
It’s useful to analyse where stressors come from in the home. It may be a threat from another cat due to a conflict between companion animals or a perceived threat from a cat outside the home when the over-grooming cat is a full-time indoor cat.
One thing that can be done is to ensure that the environment in which your cat lives is highly enriched so that your cat can fully express her feline desires and needs. If you can find an interactive toy that your cat loves it may help. This will help to remove some anxiety and distract your cat. If you see your cat beginning to lick herself and you think that there is over-grooming you might redirect her activity towards play instead. This should end the grooming session.
Routines and Rythms
Another way to reassure a cat is to ensure that the routines and rhythms of your cat’s life are undisturbed. This is a way to reduce stress levels.
An allergy to food is another possibility. As I understand it, it is difficult to find out which foods cause allergic reactions. It’ll probably need a full allergy trial which might be expensive and something that you won’t like to embark upon. I think you need to be guided by your veterinarian on this one and you need to trust her. There are hypoallergenic diets which can get the ball rolling which are what I would call benign type foods which are unlikely to cause allergic reactions. Allergy trials have been successful so they are worth considering.
Important: these are just thoughts. I am not a veterinarian. I am fallible. Please use your own experience and skills to solve the problem and seek help from a good and trustworthy veterinarian.
SOME PAGES ON FELINE GROOMING: