Wow! I started out feeling like the other mom was very rude to rush over and tell her child to tell the OP's dd No. But then I read some of the replies about mothers sometimes needing to teach their children how to communicate when others take things from them.
And then that made sense to me. And as well as the possibility that some mentioned, of a 4 or 5yo child allowing some other child to take their toy and then being upset about it, another possibility occurred to me: some children may have less impulse-control, and might even react violently in those situations.
Though I now understand better the other mom's possible reasons (besides rudeness) for doing what she did, I personally wouldn't deal with it that way.
Because when my children were at a developmental-level where they needed me to rush to intervene in a situation like this, this was a time when I pretty much kept myself within arms length. I wasn't sittting at a table drinking coffee and watching from a distance, cause injuries can happen awfully fast.
I have one child who went through a rather long phase of having little impulse-control (that's why I mentioned that second possibility for why that mother may have felt a need to intervene -- but it still makes no sense that she wouldn't have just been right there with her children, if she thought one of them might get violent with your daughter).
Now that my children have developed enough self-control and communication skill that I can sit off to the side and trust that they won't fly off-the-handle at some unsuspecting toddler that walks up and snatches their toy --
I just watch and see how my child reacts. And I'm pleased that both my girls are now pretty sweet and tolerant toward smaller children. If my child is not upset about letting the little one have a turn with the toy (and the other mother hasn't noticed and intervened), then I see it as a positive thing that my child is learning to be understanding and to make allowances for babies.
Now, if my child is upset and the other mother hasn't said anything to her baby, then I will go up and gently say, My daughter was playing with this -- can she have it back and you can have a turn next? And usually by this point the other mom has noticed and will back me up. If she didn't, I wouldn't, like, snatch the toy from the other child's hand or make a big deal, though.
With the large toy that had room for others, I found myself wondering if the older boy was following his mama's example of "teaching" your dd by telling her no.
I would probably feel annoyed -- but I think I would redirect my own child to something else.
I might tell the older child, "Okay, well please let dd know when she can have a turn, then." But I can understand kind of reacting to that mom's whole demeanor -- I would have reacted similarly until I read this thread and realized that there might actually be moms who sit off to the side before their children have developed the necessary skills to deal with other children.
And then come swooping in.
As I've said, before mine developed those skills they had a tendency to react aggressively -- so I HAD to be there with them. Sitting at a table enjoying my coffee wasn't even an option.
I also prefer to give the other mom a chance to deal with her child, rather than rushing to have my own child "teach" someone else's child about "No."
-- but I think it's a good idea to give the other mom the benefit of the doubt about her intentions.