If you need stricter replacement matching, PostgreSQL's regexp_replace function can match using POSIX regular expression patterns. It has the syntax regexp_replace(source, pattern, replacement [, flags ]).
I will use flags i and g for case-insensitive and global matching, respectively. I will also use \m and \M to match the beginning and the end of a word, respectively.
There are usually quite a few gotchas when performing regex replacment. Let's see how easy it is to replace a cat with a dog.
SELECT regexp_replace('Cat bobcat cat cats catfish', 'cat', 'dog');
--> Cat bobdog cat cats catfish
SELECT regexp_replace('Cat bobcat cat cats catfish', 'cat', 'dog', 'i');
--> dog bobcat cat cats catfish
SELECT regexp_replace('Cat bobcat cat cats catfish', 'cat', 'dog', 'g');
--> Cat bobdog dog dogs dogfish
SELECT regexp_replace('Cat bobcat cat cats catfish', 'cat', 'dog', 'gi');
--> dog bobdog dog dogs dogfish
SELECT regexp_replace('Cat bobcat cat cats catfish', '\mcat', 'dog', 'gi');
--> dog bobcat dog dogs dogfish
SELECT regexp_replace('Cat bobcat cat cats catfish', 'cat\M', 'dog', 'gi');
--> dog bobdog dog cats catfish
SELECT regexp_replace('Cat bobcat cat cats catfish', '\mcat\M', 'dog', 'gi');
--> dog bobcat dog cats catfish
SELECT regexp_replace('Cat bobcat cat cats catfish', '\mcat(s?)\M', 'dog\1', 'gi');
--> dog bobcat dog dogs catfish
Even after all of that, there is at least one unresolved condition. For example, sentences that begin with "Cat" will be replaced with lower-case "dog" which break sentence capitalization.
Check out the current PostgreSQL pattern matching docs for all the details.
Given my examples, maybe the safest option would be:
UPDATE table SET field = regexp_replace(field, '\mcat\M', 'dog', 'gi');