First, don't panic. It can be temporary (or it can be maddening months, but not if you use the cure below). Contrary to popular belief, lice do not spread disease. They're a nuisance, not a health hazard. The stigma that is attached to them is probably more damaging than the little buggers themselves.
Is it lice? You'll probably never see the lice themselves. More likely, you'll see the nits. The nits are the little eggs that are laid close to the scalp. They look like dark dandruff, except they don't flake or lay flat like dandruff. And they don't come out with normal combing. Your child WILL, however, feel the lice. Every time she's just washed her hair and is drying off, the itching will be severe. Severe enough to make many of them cry or act nuts.
How did she get it? Our little neighbor boys, Christopher and David, sported shaved heads just before we discovered the lice on my daughter. Their mother vehemently denied it, but I found the timing too coincidental. Your child probably got lice from another child. It likely had nothing to do with her surroundings or cleanliness. Lice actually prefer clean hair. They pass from person to person, and children don't generally have the same sense of "personal space" that we adults do.
What do I do? Well, I'll tell you one thing you DON'T do. Don't inform your child's playmates. I made this mistake, thinking I was being responsible. More than a year later, one of our neighbors who had formerly been over a lot still moved her children away from mine. It helped not at all. If they had it, telling them wasn't going to make any difference. It only served to stigmatize my daughter for something she had no control over.
Another thing not to do is get extra short haircuts. Because I was paranoid about them, I shaved the boys' heads. Neither of them had any lice, but I didn't want them to. That was a drastic measure that was unnecessary. The only purpose it served was for Elisha's beautiful golden hair to come back in brown. It was a gross overreaction. As was taking down all the curtains to be cleaned, stripping all the beds and linens, and giving the house a deep clean. Unnecessary.
I couldn't stomach the thought of putting chemicals directly on my children's heads to be absorbed into the scalp, and I'd heard they didn't work that well anyway. Three weeks of spending two hours a day combing through Jenna's hair to remove the nits only to have them show up the next day left me at the end of my rope, and sobbing to my sister-in-law. "I wish you would've called me earlier." Paula rides the short bus as an aide, and her driver ends up with lice a couple of times a year. We were saved! The Bus Driver's Remedy worked WONDERFULLY!
What you need: