The cause is not entirely clear but in some girls there seems to be a slight increase in estrogen production for a short period of time. The estrogen is what causes the breast to sprout. In the vast majority of girls who have this, the breast bud will shrink down again over a period of several months, or if it doesn't become smaller, at least it won't continue to enlarge. The other pubertal changes (rapid growth, pubic hair) do not occur.
When I see girls with premature thelarche, I make sure I do a thorough physical examination, looking for anything that would suggest a more serious hormonal problem. If the rest of the exam is normal, then there is no need for any specific tests. It is recommended that the breast changes be monitored closely for several months, meaning monthly or bimonthly visits to the doctor to see if it goes away or continues to progress. If there are abnormalities on the physical exam, or if the breast development continues, then blood tests, x-rays, or an ultrasound of the pelvis may be indicated. Precocious puberty can occur in this age group, but it is very rare.
I recommend that you make an appointment to see your daughter's physician to have this examined. In some children, particularly very chubby children, it may look as though there are breasts, but it turns out to be just excess fat. Your physician should be able to sort this out and determine if anything further needs to be done.