Kitties are known to be fastidious groomers but be careful not to confuse psychogenic alopecia (hair loss) with normal feline grooming. Psychogenic alopecia (PA) is characterized by excessive grooming and may result in damage to the skin, with secondary bacterial infection that can require therapy. The cause of PA is unknown, but it is possible that grooming releases endorphins that may calm cats that are stressed for a variety of reasons.
If a cat is observed to be grooming excessively, the first step is to rule out medical causes, including itching induced by allergies/fleas and/or pain secondary to arthritis or some other condition. Once a medical cause has been ruled out and a presumptive diagnosis of PA is made, minimizing stress is extremely important.
Making sure that no conflict exists between pets in the house, that feeding and sleep schedules are regular, and that specific time is set aside for play/attention by the owner are good ways to minimize stress. In some extreme cases, consultation with a veterinary behaviorist and/or anti-anxiety medications may be helpful.