My 14 month old came home school with a blister around the nail of her big toe filled with puss and now the toe is really red?

Drain. This needs to be drained. After the drainage procedure she should be placed on antibiotics and the toe should be soaked frequently. Insure her immunization a are up to date.
Paronychia. Paronychia is an infection of the finger or toe at the nail margin. This is usually fairly painful! Warm foot soaks and NSAIDs like Advil (ibuprofen) or Motrin are helpful, but oral antibiotics and sometimes drainage are often required.