My sister 7 yrs has moderate/severe dandruff(near forehead) could it cause hairfall?

Maybe : Severe dandruff will predispose the scalp to higher chances of infection etc that will accelerate the rate of hair loss and requires treatment ...

Not likely: Dandruff would not cause hair loss. Would recommend that you take your sister to the doctor since some infections or scalp conditions might cause hair loss and look like dandruff.