It sounds like your Sheltie may be having an allergic reaction to something. In a lot of cases, when a dog has itchy and red paws, it is a food allergy. Bring it to the vet and get it checked out, they will be able to determine wether it is a food allergy or allergy to something else. Food allergies can be contributed to dyes in the dogs food, if your pet is suffering from a food allergy, then the vet can give it a shot of cortizone and prescribe a new diet for your dog. Your dog may be suffering from mange if it is not a food allergy. Especially if it is a young dog that is maturing. Mange is a mite that all dogs carry and usually shows up around maturity, it attacks the immune system, so dogs with strong immune systems usually don't show signs of it and don't have to be treated for it. A skin scrape can be performed to determine wether or not your dog has mange. There are two types of mange, demodex which is not contagious and can be treated with dips, and sarcoptic which can be passed on to other animals as well as humans, in humans it is known as scabies. So if you are itching as well it may be mange. Get your dog checked out, and the vet should be able to fix her up for ya.

One thing which you might want to check: If you applied any type of lawn fertilizer, especially and emphatically, the weed-n-feed type. The herbicides can cause all kinds of problems...the weed-n-feed fertilizers will put off toxic low lying gases for weeks even upon lots of watering. There are some stories about dogs with similar symptoms on the links from this website: www.thebestcontrol.com

What was the problem?