S.H.
Dear Kimberly,
My son had a similar fear of cats, and we have 2 cats! He was 2 yrs old and not really talking much when this happened. We started with photos of cats. Showing them to him. Then we would touch the photos of the cats and say "cat". Talking about them, what they do, where they live. I would show him videos of cats/kittens on YouTube. Then we moved up to looking at them from a distance, in person and doing this every day until he no longer got upset about them. It took a few weeks and now it's no big deal.
I would suggest doing the same. Get a catalog w/photos of costumes. Look at a Cinderella dress perhaps. Talk about them. Have her touch the photos. Explain what they are. Maybe even look on YouTube and see if you can find something there. Then go to the store and look at them on the rack or borrow one or two and hang them in the closet or put them on the floor so she can see them. Maybe a friend has one in her closet she can see. Have her touch them if she can. Never do more than she's willing to confront. Have her step on them or move them around so she feels a bit in control. Move up to her seeing others in them, or even possibly trying one on herself, perhaps a hat or something.
I think you need to take these things seriously because they cause so much upset, but to show her that she can be in control of the situation and that it's not life threatening in the here and now.
Best of luck. I know how upsetting these things can be as a mom.
-S.