@UnknownStuntman
Am I the only one who is singing the thread title to the tune of Chucklevision?
PMSL! 
@OkMaybeNot
OP, first of all, contact her directly, and ask her to take everything down that she has copied from you. If she ignores you and/or refuses, then I would take heed of the post by @mummymeister at the top of this page...
I think that you need to take this seriously and get a solicitors letter sent for passing off. It will affect your business especially if she is undercutting you in terms of price. Unfortunately there are a lot of people who will just look at the two items, not realise the difference and go for the cheapest. you need to protect, formally, what is yours. She may just be doing it for Christmas pin money but then if she makes enough it might not just stop and then the damage to your business would be greater and long term.
I am involved with advice to small business start ups and the common mistake that one person businesses make is that they don't see their business as "real" . You have to adopt a "big business" mentality over things like this. Obviously, she wont be happy that you have sent her a solicitors letter but this is business and not against her as a person. The example about cola and how these big companies react is spot on. You need to act now before there is any reputational damage to yourself. good luck.
The woman in question is a proper cheeky cow, and as some people have said, it's not that unusual sadly. Some people are scavengers and parasites, and they will steal ideas and intellectual property and present them as their own at the drop of a hat.
This is way more trivial, but I have a twitter account, (with about 5000 followers,) and although much of my tweeting is just general opinions and comments, I occasionally post some funny, or clever comments (trumpet blowing moment sorry!) And other twitter users (who I follow and follow me back,) have cut and pasted them, and reposted them, and presented them as their own.
I have tweeted 'cheeky twat! that was MY wording!' Resulting in them either ignoring me or blocking me!
Anyone who is following us both, can and will see that I posted it first, but anyone NOT following me, will think that it was their wording.
So I have, on occasions, 'named and shamed' them, and @ replied them in, so anyone following them can see the comment wasn't theirs! The followers don't care, but I do, as it makes me angry that someone stole my intellectual property - word for word!
So if she doesn't take it all down when you ask, then along with taking some legal action (as some posters have suggested,) I would also be naming and shaming the cheeky cow. Let everyone know what she has done. Don't hold back!
I am also dying to know what it is you do, that no-one else does for 300 miles!!!