Phobia Support Group
A phobia (from the Greek "fear"), is a strong, persistent fear of situations, objects, activities, or persons. The main symptom of this disorder is the excessive, unreasonable desire to avoid the feared subject. When the fear is beyond one's control, or if the fear is interfering with daily life, then a diagnosis under one of the anxiety disorders can be made.
Secondly, normally with phobias, there is a deeper fear underlying. Maybe she saw something scary happen to somebody else during a haircut and doesn't want that to happen to her. Maybe she's afraid the hair cutter will hurt her with the sharp objects. Usually if you can address that initial fear, you can help to correct the thinking that goes along with it.
I would recommend counseling if she's old enough. A counselor might be more helpful to her than a family member- I have that experience. I hear things from my family and shrug them off. Then I talk to my therepist, arrive at similar conclusions myself and am satisfied.
There are pleanty of ways to target specific phobias. Two that I am going through are exposure therepy and cognitive behavioral therepy.
Exposure therepy is basically taking baby steps and working your way up to facing your fear. Can your sister hold a pair of scissors in her hand? Start with that. Then have her practice cutting hair on a barbie doll or something. Then have her try to cut one strand of her own hair (not a chunk...otherwise her hair will be completely lopsided and look dumb). Then see if you can hold the scissors near her hair. Take it slow...exposure therepy is all about stepping outside of one's comfort level and may take months to see a real change.
Cognitive behavioral therepy is basically working to talk yourself through a panic attack. She needs to practice taking steps to calm down when she panics and reasoning what's going on in her mind. The general idea behind cognitive therepy is that you have an initial thought before you feel something, such as fear or anger. If you can recognize that initial thought and reason through it, you can change it and feel something different.
Overall, know that this takes time. Sometimes more than others. DON'T criticize her for her fear. She probably knows it is irrational and feels badly enough about it already. DON'T just strap her in a chair and have someone give her a haircut. It isn't a roller coaster for her- that could be a very traumatizing experience. Give her time and space to figure out what's going on.