Let Her Choose
After reading this conversation, there is no doubt the mother is a bit more controlling than is needed with your kids. There is no harm in letting your kids decide for themselves and especially if it is concerning something as small as picking up a dress.
The young girl probably wants to choose her own outfit to fit in better with her peers, but her mother won’t let her. There is no point for the mother to be so troubled about clothes; just let the little bird fly out of her nest already.