Hair loss from stress and subsequent overgrooming is commonly referred to as psychogenic alopecia. The word psychogenic1 means "originating in the mind" and the word alopecia2 means hair loss or baldness. This condition is more common in cats, particularly in the "nervous" personality types.
Typically the skin is not involved and there are no other lesions besides the hair loss (or broken off, short hairs). Changes are often subtle at first, but in time the grooming behavior may become obsessive with increased stress. There are many possible causes for hair coat and skin problems. Only your vet can diagnose what is going on for sure after a physical examination of your pet.
References:
psychogenic1: psychogenic. Dictionary.com. Dictionary.com Unabridged (v 1.1). Random House, Inc. http://dictionary.reference.com/browse/psychogenic (accessed: November 05, 2007).
alopecia2: alopecia. Dictionary.com. Dictionary.com Unabridged (v 1.1). Random House, Inc. http://dictionary.reference.com/browse/alopecia (accessed: November 05, 2007).
