It is difficult from the description given by you to be able to say which condition your daughter is suffering from. Imiquimod (Aldara), a topical immunostimulant used for the treatment of genital warts (USFDA approved indication) but is also used to treat actinic keratoses. Actinic keratosis is a skin condition characterized by rough, scaly patches on the skin of face, lips, ears, back of your hands, forearms, scalp and neck. The usual cause is overexposure to ultraviolet (UV) rays. This is usually a precancerous condition, which can develop into skin cancer. The lesions can increase in size and spread to surrounding tissues.
From the description of the condition of your daughter, it seems she might have been diagnosed with scabies, which is a common childhood skin infection that causes small itchy bumps and blisters on the skin. The causative organism is a mite, which burrows into the skin. The lesions can appear around the hands and feet (including elbows, wrists and between the fingers) and also genitals, navel, and buttocks.
Scabies is highly contagious and is usually transmitted by skin-to-skin contact, especially in crowded areas. The lesion is small, intensely itchy bumps, blisters that may burst on scratching. Other members of the family may also need treatment.
I would advise you should check with your doctor to get the exact information.