If I were you, I would go ahead and make the size 10. Luckily, it’s a loose fitting dress and we want to make sure that it at least fits in the hips. If you want to take it in a bit in certain areas, I would just baste your adjustments past your seam allowance. And when she grows into it, just remove the basting stitches so it goes back to its original size. Also, it would be a good idea to cut out the size 10 in cheap muslin and bast the main pieces together. Have her try it on and if it seems way to big, even in the hips, you can still cut the pattern down to the size 8. We’d love to see a picture when you finish! 🙂