My daughter is 26 months old and has a bug bite of some kind on her thigh and it has a large kinda knot underneath it but it hasn't come to a head ?

This sounds like it: might be an infection, as opposed to a bug bite. Of course if you're somewhere where there are insects out at this time of year, it's possible. I would recommend that you have her examined by her doctor to be sure. Meanwhile, have her sit in a warm tub or apply warm compresses to the area. If it's itchy, she can have Benadryl (diphenhydramine) orally. Don't try to squeeze it to open it up; you may make it worse.