A small, lean figure with a dry sense of humour, unfazed by flat tyres and solitude, Mahood seems honed for no-frills survival. Cleaning out her vehicle after the long drive with her dog, Pirate, she found a wire used for digging out witchetty grubs, a tomahawk and remnants of cooked kangaroo tail. Yet her conversation and her creative work have the subtle eloquence of an urban intellectual.

Many readers remember with passionate respect her first book, Craft for a Dry Lake, a memoir published in 2000 and winner of the NSW Premier's Literary Award for Non-Fiction and the Age Book of the Year for non-fiction. Prompted by her father's death in a helicopter crash, she wrote in earthy, glistening prose about her first trip back in 1992 to Mongrel Downs, the Tanami cattle station where she had been raised amid low spinifex country and lakes that dramatically fill and disappear.

Her long-awaited second book, Position Doubtful, tracks her itinerant life and work since then, exploring Australia's complexity through her unusual position at the interface of cultures. The title, a term that appears all over maps of the region, also describes her restless love affair with the remote place that shaped her.

"It felt like there just weren't enough voices out there that had both the knowledge and the capacity to make it accessible to a broader public," she says of her decision to write again. "There's this huge continent, most of which Australians don't know about, and I happen to know a lot about a pocket that can stand for other pockets. Every tiny community in outback Australia has the stories around it that I've amplified in this book."

Her original purpose was to trace in images and words her own connections to the palimpsest of geography, people and history. Over the years her work broadened into collaborations with the Aboriginal people to record their stories on beautiful hand-painted canvas maps that layer natural and traditional places with the names of missions, cattle stations and mines.

During her latest visit to her base in the tiny community of Mulan, she continued 10 years' work with the Walmajarri people of Lake Gregory to create a calendar of seasonal plants and animals on a large circular ground canvas.

Mahood was only three weeks old in 1953 when her father was posted as acting superintendent to Hooker Creek, a Warlpiri community where she was cared for by a woman who gave her a skin name, a bush name and a dreaming. At school in Alice Springs, she says, "I had a natural affinity with the Aboriginal kids; I was this weird little outsider who didn't quite fit in the classroom."

By the time she was 10 her family had lived all over the Northern Territory for her father's work as a stock inspector (though he wanted to be an artist) and settled on Mongrel Downs. In the 1980s the station would become the Warlpiri-owned Tanami Downs, which is now being liquidated because, despite being well managed, it can no longer support viable numbers of cattle.

Mahood led a "dual life, to-ing and fro-ing between the life in absolutely nowhere and Perth boarding school. I think that set up the dichotomy I still occupy between the intellectual nexus and this land-based knowledge".

She began university but found "I don't have an academic temperament, I kept getting absorbed in something not on the course". At Julian Ashton Art School in Sydney she learnt the unfashionable formal skills that gave her confidence to work in experimental forms of painting and sculpture. With commercial shows, grants and teaching, she has mostly made her living as an artist.

It was only after keeping a journal about her first trip back to the desert and the art she made there that she began her first serious piece of writing. Some of it she recognised as "good enough" to become Craft for a Dry Lake.

The title and cover image for that book came from an old tin boat she found in the desert. She thought it was the boat she had sailed on with her father as a child and an artist friend, Pam Lofts, photographed her dragging the tinny across the sand. Later Mahood remembered their boat had been a wooden yacht and could not have survived.

Lofts' death is one of many that punctuate Position Doubtful. Mahood's mother dies "suddenly and without fuss", her dog Slippers is hit by a car, and some of the older Aboriginal people succumb to illness.

Recording Indigenous knowledge of the land is increasingly important to Mahood and she reproduces an English translation of the story told by a Ngardi woman, Dora, of her people's travel on foot across the land, each place named and significant.

"Change is why humans are on the planet," she says. "But I do feel that original way of being in the country, that evolved from people living in it for thousands of years and walking all day every day, produced a sensibility that is almost gone now."

Mahood is affectionate but unsentimental about the Aboriginal communities, which she depicts as fraught with the constantly changing policies of kartiya (whitefella) bureaucrats and "the dastardly things people do in pursuit of their own agendas – I'm talking about blackfellas". Much of the latter was left out but may appear one day in a fictional form.

She did struggle to write "a bad novel" after Craft from which she later extracted a short story, which won the Elizabeth Jolley Prize. She thinks there are more stories buried in the discarded manuscript.

"I'm interested now in the challenge of fiction, that's the bone between my teeth," she says. There she can further explore "the gritty ground full of all the stuff you're not supposed to talk about; it's so clouded over with obfuscation and people's sensitivities and anxieties and prejudices that cut both ways. Within it are these really complex stories that don't fit any stereotype and I find that totally fascinating."

In order to do her own work, Mahood has to retreat from the chaotic communal life of Mulan to her "introspective, fairly introverted self" and her home outside Canberra, where she shares a large studio shed with friends.

Some of her new art will be sculptures on welded steel frames using old blankets and a swag cover from the Mulan tip. Some may be paintings that include text, such as the series of watercolours she painted to capture the long, low mountain range between Mulan and Balgo: nine postcards illustrate the story of her trying to leave Mulan, stopping to pick up a woman who then urged her to investigate distant smoke, which led them to some women who had run out of fuel, so Mahood gave them her fuel and had to stay the night at Balgo. On the last panel the passenger chides Mahood, "People shouldn't go bush without enough fuel".

However, she says, words are the hardest but most powerful medium for her ideas. She has learnt the craft by reading authors such as Alice Munro ("I felt a knife had been inserted in my brain and words inserted") and V.S. Naipaul ("I counted about 10 things he achieved in a couple of paragraphs and I could manage four").

"People imagine a book came out of your head onto the page," she says, "and you feel you've grappled an enraged, rabid orang utan for about five years, losing more often than winning. A lot of the time I really hate writing, but it's like a Rubik's Cube and click, click, click, suddenly it's all in place."

Working from journals and notes scribbled over the years on scraps of paper, in her car logbook and whatever was to hand, she used the software Scrivener to organise the fragments into categories and then a linked manuscript, which took precise editing to produce what Indigenous writer Bruce Pascoe praises as "chapters [that] unfurl like ribbons of red dunes".

Position Doubtful is more outward gazing than her first grief-driven book and Mahood says she's done with writing memoir.

"I couldn't think of writing a book like Craft now; it's someone else who wrote it," she says. "I'm somewhat shocked that I wrote it, to have been so raw. I know that's what gives it its power and it's still the element that upsets some of my family – that's the downside of having a writer in the family. Because I wrote it I now don't need to write it."

Position Doubtful is published by Scribe at $29.99. Kim Mahood will speak at Gleebooks in Sydney on August 23 and at Melbourne Writers Festival on September 4. 

And Another Thing

Mahood was able to finish Position Doubtful in the past year after receiving a $40,000 grant from the Australia Council in the only round that considered all art forms together before the Minister for the Arts, George Brandis, cut funding.