The clitoris is protected by a fold of skin-like tissue that acts as hood over the top of the clitoris. This is analogous to the male foreskin or prepuce, and is called the clitoral hood.
anatomy

1 Accumulated smegma
2 clitoral hood
3 clitoral glans
4 minor lips - labia minora
diagram from: http://www2.hu-berlin.de/sexology/ECE3/html/clitoral_adhesions.html
When the clitoris is engorged the hood slides away exposing the clitoris for sexual stimulation. It is lined with grease glands that secrete an oily material which lubricates the area and keeps this tissue pliable and soft. Smegma is composed of a mixture of desquamated surface cells and this grease. Children, both boys and girls, do not appear to create significant amounts of smegma. The body's production increases in adolescence suggesting a functional or protective role in sexual activity.
When this greasy material or smegma is not removed it can even harden in the fossa or groove surrounding the clitoris and in severe cases the irritation produced may produce adhesions. This means the clitoral hood or foreskin can no longer move back and forth over the glans. This may make sexual activity painful.
When smegma collects in the groove around the clitoral hood it may smell and collect bacteria and other germs. Cleaning the area is usually easy and involves pulling back the hood to expose the clitoris. This is similar to a man pulling back the prepuce or foreskin but is easier in men. Women sometimes find it can be achieved using a clean, wet, q-tip and wiping around the fossa of the clitoris. Warm tub baths are also useful and GENTLE hand-held shower heads work well. It is impossible to clean this area by simply standing in a shower that does not detach.
The idea that smegma causes cancer is a myth. There is no evidence in either women or men, that smegma causes cancer in yourself or your partner. Indeed it may have a protective role in sexual activity.
Around one in four women may have clitoral adhesions that make cleaning this sensitive area more difficult. In these cases it is even more important to avoid the collection of smegma. Sometimes your doctor can gently release these adhesion but in rare cases they need surgical release.
In young women, often in their teen years, lichen sclerosus (LS) an inflammatory dermatosis of the vulva can cause potentially serious damage to a young woman's perineum. The long-term effects include thinning of the labia minora and scarring and adhesions of the clitoral hood and labia.
In western societies clitoral hood removal, essentially the same operation as male circumcision, is rarely used but when adhesions occur then clitoral hood surgery to release the scar is sometimes needed.
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