At around age three, most children enter into a magical time where make-believe is the order of the day. Imagination and creativity spring to life. Playtime becomes a setting where wonderful dreams and desires are acted out as kids learn how to pretend. A few props can turn an ordinary rainy afternoon into a trip to a magic castle or the Old West.
But this rich imaginary world is peopled with both heroes and villains, with both marvels and monsters. New fears are a necessary part of entering the world of possibilities. As the imagination blossoms, kids who never before had problems with the dark are now terrified. The neighbor's friendly dog is seen as a menacing danger. An ant on the sidewalk might as well be a powerful alien. Monsters!
Most children, Teresa, will develop one or more deep fears to work through. It might be people in masks, old people, or people with scars. It might be parents leaving or burglars coming. It might be imaginary creatures or wild animals. It might be bugs.
A natural response for parents who see their children cowering before an inchworm is to try to talk their children out of the fear. Kids respond, though, by cranking up the imagination -- the imagined possibilities become worse, not better. And the children feel disconnected from their parents. Ridiculing or threatening children for their fears is even more damaging (sadly I hear this from time to time at playgrounds and stores).
Instead acknowledge the fear, while remaining calm yourself. Assure her of your protection and support. When children see that you take their concerns seriously, they feel closer to you and are more ready to work through the fears.
Do not force your daughter to confront the object of her fears.
One of the fastest ways to help, though, is to provide opportunities to play with NON-THREATENING versions of them. I know a little girl who was terrified of all dogs. Her parents took her to visit a litter of newborn puppies. She was delighted. They got her a cute dog stuffed animal -- she felt mixed. They watched Snoopy videos. Soon her stuffed dog began chasing her dolls, but her dolls learned how to make the dog friendly. In her pretend play she worked through her own fears.