There could be several reasons for this. Firstly your dog may have dry skin which could be due to not getting enough fluids in its system or from an irritation such as not washing off all the soap after bathing your dog.
Secondly your dog may have hot spots. A hot spot is a localized area of skin inflammation and infection. The infection can be superficial or deep. Also known as 'pyotraumatic dermatitis', these common skin lesions are usually caused and made worse by biting, licking, or scratching. There is usually an inciting factor to initiate the extreme licking and scratching behavior. Look for fleas, mites, or other external parasites, an insect sting or bite, allergies food, inhalant, contact, or injury skin wound, scrape, etc. Some animals have been known to 'start' a hot spot out of boredom or stress-related psychological problems.
The first thing to do is speak with your veterinarian. Due to the rapidity of spread and possibility of deeper skin infection, it is wise to start treatment with your vet as soon as possible. Also, these hot spots can be very painful to the animal, and it may be wise to use a muzzle if need be for your protection as well as to stop your dog from reaching the irritated area.
The treatment that your vet will advise for hot spots is firstly to dry them out and get air to the area. Hair loss is a feature of hot spots, but hair can also mat over the inflamed area, covering up a potentially much more severe and large problem. They will then advise that you cleanse the area with cool water and a gentle skin cleanser. After cleansing it will be advised to press a cool compress to the area 2-4 times a day with a cool wet washcloth. The vet may also prescribe some form of medications depending on the severity and size of the hot spot, your veterinarian may prescribe oral antibiotics, topical drying sprays or medications, and or special shampoos.
The best way to get your dogs hot spots to go away is to see the vet. I went to the vet and they completely erased my puppies hot spot. Some people that peroxide can help to.