Self-injurious behaviour is common. Cutting skin is probably the most common specific behaviour, but there are many other varieties of self-injury.
There are different reasons why it might arise, or factors that might be motivating the behaviour.
Quite often self-injury leads to a feeling of relief, of focus, of emotional intensity, in the midst of deep anger or sadness. Sometimes a long-suffering person may feel as though the capacity to feel has been lost--he or she may feel numb or empty--and self-injury gives rise to some type of feeling for a moment. Also, an act of self-injury may cause someone to feel "in control" during that moment, while they may feel "out of control" in other parts of life.
Another common motivation is self-hatred. Physical pain may be desired. The sequence of self-hatred, leading to self-injury, leading to a sense of relief, leading perhaps to guilt or worsened self-hatred afterwards, can become a powerfully reinforced, self-perpetuating behavioural pathway.
Another motivation is a wish to experiment with the idea of suicide, perhaps with the thinking that cutting skin deeply enough could cause death, but then discovering that the act of non-suicidal self-injury creates a feeling of focus, control, excitement, or relief.
Self-injury can be a very private act, but sometimes can be an overtly interpersonal act, a type of non-verbal communication. Such communication can sometimes become part of an interpersonal dynamic. This dynamic can sometimes (but not always) be part of a vicious cycle, making symptoms worse (David Dawson's ideas, as expressed in Relationship Management of the Borderline Patient, can sometimes apply here).
Self-injury can become part of a person's sense of identity or personal culture, particularly if it has arisen during adolescence or young adult life.
Regardless of the various motivations, I believe that self-injury is an addictive behaviour. Just like alcohol or opiates, it may create some form of relief in the moment, with consequences to pay afterwards. The person engaging in it may recognize that it isn't "healthy" but may continue, or may feel unable to stop.
In the treatment of any addictive behaviour, I believe there are a number of therapeutic principles which can help:
1) If there are underlying problems which are driving the behaviour, or triggering it, then these problems may be addressed with whatever help is available. For self-injury, these problems may include depression, loneliness, irritability, boredom, struggling with issues having to do with identity, meaning, personal culture, etc. Sometimes addressing these underlying problems satisfactorily will solve the problem of self-injury.
2) The self-injury itself could be understood as a psychological defence. If a defence is to be lowered or set aside, it has to be with the will, motivation, and consent of the individual. Without the defence, there may be periods of more intense discomfort ("withdrawal symptoms"), at least initially . I do not believe that a person should be urged or told to "stop cutting". I do believe that a gentle, frank discussion about addiction, triggers, abstinence, etc. could be introduced, with the patient's consent. Addiction treatment programs have a stronger sense of the dynamics here -- a person cannot and should not be forced or "contracted" to stop something. Such a dynamic is unlikely to help, certainly not for very long.
The will to change has to come from the person seeking help, particularly if a strong theme for the person is having self-control, autonomy, freedom--and particularly if the person's problems have in part been caused by past trauma, in which self-control, autonomy, and freedom were oppressed.
3) Alternative strategies to deal with emotional distress can be found and practiced. Common triggers could be identified (e.g. feeling frustrated, feeling bored, feeling lonely, craving sensation of some type), and plans could be formed to negotiate through these moments. A cognitive-behavioural model could be useful (e.g. using journaling), and meditative practices could be helpful (e.g. mindfulness exercises).
Sometimes "substitute" activities such as rubbing ointment on the skin, snapping an elastic band on the wrist, marking the skin with an erasable pen, etc. can be part of a transition away from more harmful self-injury behaviours.
4) If there is guilt or secrecy around the behaviours, it can help to have a forum--such as psychotherapy-- to talk openly about the issue, without the fear of the dialog leading to a highly charged or panicked emotional exchange. The power of guilt or the power of secrecy can be perpetuating factors. In addiction treatment models, it is acknowledged that a person may not have the power within themselves to stop -- help may be needed -- acknowledgment of this fact may break the cycle of guilt.
In practice, I find that self-injury can gradually settle down as other problems settle. In many cases it may--ironically-- settle best when it does not become a primary focus of therapeutic dialog. It may resurface from time to time under stress. If the problem is very intense and acute, people may have a hard time making it through the day or the week, and may feel that the existing help is not enough (e.g. the therapy may feel inadequate). But I think that sticking to a very stable, regular, open-ended therapeutic framework is important.