Your poor girl!
What you are describing is a beautiful, textbook description of a "hot spot." A hot spot is the common name for "acute moist pyoderma" which is a type of skin infection.
Let me explain more about how this happens...
There are commonly yeast and bacteria living in small numbers on the skin surface. When a dog starts chewing or scratching at one spot, she opens up little scratches in the skin surface, and the yeast and bacteria invade there. The fur stays wet from oozing serum from the scratches, and this keeps the area moist and warm - just the kind of place that bacteria like to grow!
As the bacterial numbers increase, the scratches get infected and ITCHY! The dog scratches more... and soon a large area of red, raw, weeping infection can occur.
More about hot spots:
And here is a photo of a dog with a hot spot:
Treatment involves shaving all the hair in the affected area (as shown in the above photo) - which is often quite large.
This allows the skin to dry out.
Antibacterial washes are used on the skin and antibiotics (usually for 2-4 weeks) are given by mouth. If it is very inflamed and itchy, a short course of corticosteroids would likely be used to give the dog relief and stop her from scratching and thus exacerbating the problem.
You may be able to treat this by washing the area with an antibacterial soap, after trimming a wide area of hair around the hot spot. One example would be chlorhexidine scrub (which you can get at pharmacies off the shelf in Canada and the USA). Your pharmacist would be able to suggest an antibacterial soap if you don't see this one. It is often called Hibitane.
I suggest people wash small areas of pyoderma 3 times daily for 3 days. Scrub hard to get that scaley, scabby material off it. Rinse well. Pat dry. You can apply corn starch to keep it dry. Then continue to wash twice daily for 4 more days.
In order to relieve some of the itchiness before you see a vet ,you can treat with BENADRYL (diphenhydramine).The dose that one generally gives is 1mg/lb. Is she about 12lbs? It comes as 25 mg tablets, and if she is 12lbs, her dose would be HALF a TABLET. This can be repeated every 8 hours for 24-36h.
Children’s liquid Benadryl can be used. It comes at a concentration of 12.5mg per 5mLs – which is just 2.5mg/mL. Thus, to get 12mg into her, you would need to give 5mLs – which is 1 teaspoon!
Here is more about Benadryl:
You should see improvement within 30 minutes. It may cause drowsiness.
Watch VERY closely that there are no more patches coming up.
If this is not improving, then you may need to see a vet to get a prescription for antibiotics for your girl!
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I will still be here to provide more information if you need it.
The above is given for information only. Although I am a licensed veterinarian, I cannot legally prescribe medicines or diagnose your pet's condition without performing a physical exam. If you have concerns about your pet I would strongly advise contacting your regular veterinarian.
Good luck with your dog!