As others have said, it is possible, but is unlikely to happen that often - as with most highly territorial and well-armed species they are quite aware of how dangerous a fight can be to their own health, and will only be likely to really go for it seriously if their life depends upon it. Cats largely deal with disputes with staring, posturing, and a lot of cursing (ie. hissing/spitting/growling/screaming).
If you watch 2 cats who are having a border dispute they will usually try to make themselves appear as big and fierce as possible - hair standing up, tail fluffed, mouth open to show the fangs, and hissing/growling. They will glare into each others eyes without blinking, but usually keep a small distance apart, circling each other in a crouched position. The one who looks away first has submitted to the other, and will usually walk away. Sometimes it takes a swat, a pounce, or a bite in order for the dispute to be settled - but in the vast majority of feline face-offs, the combatants work out which is the victor before a punch is thrown - and the loser will walk away with little damage.
When it does escalate beyond this, it is almost certainly due to pressure on resources - overcrowding so pressure on territorial boundaries, not enough prey, or shortage of females. There are more likely to be such pressures in an urban environment with feral cats than in a completely natural habitat.