Sounds like how I was with my DD. I delayed her quite a lot just because she wasn't "supposed" to be reading at 2yrs. But she kept teaching herself and I finally realized it's what she needs. She thrives on it.

The school factor is a huge issue.. with a lot of people. However, it may not be as bad as you would at first think. If your daughter is advanced in many more areas than just reading then older kids may actually be the right peer group for her. My 3 year old gravitates to 5 & 6 year olds... she knows they are her equals.