I agree with many posters, its probably sibling rivalry, and she might need some special time. But I wouldn't give up on the discipline either. If she's doing this to her sibling, she's probably doing this to classmates and friends if she's not getting her way.
At our house, the kids get an allowance for small chores and special rewards, birthday money etc. Even our littlest keeps an allowance/money jar. Whenever anyone in the house, including the "big people" say hurtful or insulting words, bad words, tattle-tales, or gossips, we get fined and have to "put our money where our mouth is" and pay the person we hurt out of their own money. Usually .50 cents for bad word or insult. In addition to the "fine", the person who said the offending words must then apologize to the person they insulted, and later on do a small "report" to the whole family on why their behavior was bad. I usually give the kids a little extra time to put their thoughts together. For the older children, the "report" consists of 3 or more sentences on why the words were bad, and how they hurt people, and why they wont' do it again.
For the non-reading and writing set, we let them draw a picture and in their own simple way explain what happened, why, and why it was bad.
This activity/punishment usually winds up being looked forward to by everyone, and quite hilarious when the little ones do their "report", and that's okay. The activity is very effective for us, and seems to really reinforce thinking outside of themselves, and how their actions affects others. They seem to learn alot.
Between losing money towards toys from their spending accounts and the "reports", we hear very few mean and bad words around the house. They may roll their eyes when they older, but I'm sure what they learn now will be in their memory banks later.