I agree that the most important thing is just to read a lot - and when your DD asks a question about words take them seriously and make it fun. We sometimes even take the opportunity to open up a dictionary (whether you actually know the definition or not). It gives the child a sense that the questions are important and that there's a standard way of finding out the answer.
Word games are really fun too. Our DS4.5 still loves a game that sort of evolved when he was around 2. It's a kind of call and response game that's often starts out rhyming words - time, rhyme, slime, and so on - and then sometimes morphs because of semantic relations - from slime to green, gooey, gum, chewy. Nobody quite knows what the rules are, but it's always obvious when someone makes a great move!
In short, though, it sounds like you're doing great!
BB
