Isolated facial itching sensation could suggest involvement of the trigeminal nerve (trigeminal neuralgia). I am assuming that she doesn't have any type of itchy rash on the face that accounts for the symptoms. Also, you didn't mention if the sensation was on both sides or just one side. One-sided (unilateral) is more common in trigeminal neuralgia.
Type 2 diabetes can be associated with nerve damage (neuropathy); however, the trigeminal nerve is not a typical area involved in neuropathy. Your sister needs a check with her primary care doctor as a first step. She may very well need a neurologist to help determine the exact cause of her problem and treatment. I hope this helps.