Yes, it sounds like she is in heat. The first heat cycle can come anytime after 6 months. Most females will come into heat twice a year. (A few 'over-achievers' will do it 3x a year). The cycle lasts for about 21 days, and it is very important that your dog be kept from all interaction w/intact males during this period. You will need to make sure she does not get away from you (they can be really fast and determined when driven by their hormones). After the heat cycle ends I would highly recommend spaying her. It will greatly cut the risk of serious disease in the future and you won't have to worry about pregnancy.
As for what you should do about it... if she in heat, then it'll subside by itself in a few days. If I'm not mistaken, most female dogs go into heat between 2 & 4 times a year (someone please correct me if I'm wrong). I have 6 female dogs, but I always get mine spayed at 6-months, so I'm a bit of an amateur when it comes to dogs in heat.
Has she been fixed/spayed?
It sounds like she is in heat (having her doggie period/menstruating).