Actually, OCD and Trichotillomania are both anxiety disorders. Perhaps googling something like "childhood anxiety" or "anxiety disorders" or similar phrases might be more informative. And no, most children who suffer from anxiety do not understand why they do certain behaviours. Also, many will "lie" out of frustration and embarrassment at themselves for not being able to "control" these behaviours - I suspect your neice is not even aware of the fact she is pulling out her hair or eating it until someone draws her attention to the behaviour. What she requires are tools which will help "lessen her anxiety" so that she will not complete these behaviours. This is where the correct medical person should be able to help you (unfortunately, finding the correct person can be difficult).
I have and it is still unclear...She is up for another doctor vistit tomorrow... The first one has no idea.. He feels like it maybe a form of OCD....I am still lost on the issue..
I suspect anxiety causes it. You might wish to google the term "trichotillomania" to read more about this disorder.