You should let your daughter dress how she wants although it also depends on her age and whether or not she's dressing in clothes that are not appropriate for an occasion, the weather etc.
If your daughter is a teen then it's less of a concern that she dresses in more revealing clothing than it would be if she were a pre teen or child.
The same is true with weather appropriate clothes or clothes for school.
If your daughter is younger then you have to ensure she dresses appropriately for school or for the weather but when she's a teen or pre teen then you can mostly let her dress how she wants.
Parents should let kids dress how they want as long as the clothing is appropriate for the occasion or weather.
Although parents should let their kids dress how they want to dress the parents should also set some reasonable guidelines and restrictions on the clothing choices that the kids should wear.
For example a kid who is a girl should not dress in a sexy way for school and should be appropriately dressed.
Or for example a kid who's a girl should not wear a bikini or revealing clothes in public or school and should be dressed in appropriate clothes that cover the girl up properly.
And when kids dress they should be dressed in clothes that are warm for winter and cool for summer.
Usually kids that are above 4 years old should be able to dress as they want and should be able to reasonably choose clothing that is appropriate although some kids may still need guidance on appropriate clothing to wear.
Allowing your child or kid to dress themselves is an important developmental milestone.
Even for toddlers and young children allowing your toddler to pick out clothing and dressing themselves can help them to stay on track with their peers and allow them to learn new things such as decision making or solving problems.
Pre teens that are allowed to choose their own clothing and way they dress also have a stronger urge to find their own style in middle school.
Just keep it reasonable when allowing your child or teen to dress how they want and you and they will be fine.