that dress is adorable Andy and you are an old fuddy duddy. And you will let your daughter wear whatever she wants. Raise her strong and independent and she will be fine in whatever she chooses to wear.
I disagree to a point - yes, a child should be raised to be strong and independent, but they should also understand their parents' limits and respect them. My daughters will not wear whatever they want, but I also won't be dictatorial - we will discuss it if they disagree with me, but as a parent my decisions are ultimately the rule. I won't be arbitrary, I won't be unfair, and my decisions won't be unexpected - but they will be obeyed.