Ditto Ultramarina...

Let her read what she can. If the book is too hard but peaks her interest, read it to/with her.

I would keep reading a very fun activity and not get too 'schoolish' about it. Even though she is so far ahead with her reading skills, she is still a toddler, who can be strong-willed, finicky, and obstenant - um, not that I know your dd...just judging from my own dd2.5 who is in the midst of a personal Declaration of Independence these days.