I have no experience with dementia so I can't tell for sure if this advice will work for you. My answer is based on how my family told me that my niece is autistic and how a friend told me our now mutual other friend has Dystonia.
The reason people judge others like your daughter or "put a label" on them is an initial coping mechanism. It's scary unknown news that they don't know how to deal with otherwise.
It's impossible to prevent this from happening. You probably already know this since you're only asking to limit the chance of it happening instead of asking how to prevent it entirely.
The natural solution is to inform them. But this will only work if they're open about it in the first place.
Here's how you can approach breaking the news.
Step 1: Stating the fact. Explain it in a similar tone as you would telling your daughter would have her wisdom teeth removed. Try to be as objective as possible and tell what your doctor told you. Something like:
You must have noticed (/ You will notice) changes in [daughter]'s behaviour. (Alternative here is telling it right after your daughter does something odd and you point that out explicitly). We've consulted with a doctor about it ... and [daughter] has dementia.
Step 2: Explain how you expect them to treat your daughter
For those that don't know what to do now: Try to treat her like any other kid but either ignore the forgetful moments or, if you want, try to gently figure out what she would want to achieve at that time.
The above is just an example. You can probably explain far better what someone should/can do for your daughter.
Step 3: Be open to questions.
This can be hard for you but generally this really helps people to respond positively in the end.
If you are interested in what the Dementia means exactly or want to know how to handle specific situations feel free to ask me or [other people that have experience, like your sisters if applicable]. We're happy to respond to any genuine questions :)
Step 4: If you expect people to give the same advice that doesn't help or you've heard 20 times already feel free to add the following (probably not needed the first time you break the news to extended family, you'll know when you need to add it at some point):
Although we really appreciate your concerns and good intentions with giving us advice, please remember that we have consulted experts about it already. If you really want to help us please try to distract us with something fun. Like telling what amazing thing you did last weekend for example (or something else you are interested in).
Allow the news to sink in and expect some people to respond unexpectedly (this can be both good and bad). It's even possible that some respond like it's nothing new. "I kinda figured it must've been something like that. So how are you coping right now? Need some help?"
I believe (mostly opinion) that you're better of telling it sooner rather than later. The faster everyone knows what's going on the faster they can start helping you. This can even be with some small things like reminding your daughter to go to the toilet when she starts showing certain movements but doesn't remember what to do with it. (again, just an example of what I guess Dementia could be, replace with something that actually could happen if needed).
