Well, actually, I have been studying abnormal child behavior, and there is a whole "Is child masturbation bad?" Debate for quite a long time, and I personally think it is not bad, IF, however, she does not do it in public or excessively, then it is fine, I would think. From what I have studied, abuse does quite have a profound effect on anyone. If she is being abused, stop the abuse now, because if that is the case, she is probably suffering.
All the above activity is normal. If you make a big deal about it, they will think it is a big deal and become really interested. Just treat it like someone sneezing into another's face. It is not right and not sanitary. If your daughter still wants to masturbate, then she should do it in private, away from her sisters. It will eventually go away and she will stop if it is controlled. I understand that it makes you sick, but try not to let them see your disgust. Tell your 10 year old that she shouldn't be teaching those things to anyone. And what she does should be done in private. Children never understand the scope of what they do, they just do it because it feels good. But one thing she should understand is it is wrong to touch, and masturbation is private.