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This could be due to an allergic reaction to some unknown substance or secondary to insect bite etc or due to dermatitis or eczema. But nothing can be said with surety without a clinical examination.
You should wash the area and keep it clean, apply calamine lotion at the site and take some oral antihistamine or antiallergic medications like loratadine or cetrizine for your symptoms. Wear lose, comfortable clothes.
It would be best to consult a skin specialist if the rash does not resolve in a few days. You should get the relevant investigations as advised by your doctor including blood work.
Let us know about what your skin specialist advises and if you have any other doubts.
Post us about how you are doing.
Regards.