Her friend said: "It was just horrific - she talking about Jesus and all sorts of nonsense.
"I managed to get out of her that Amelia had drowned in the bath and that she had lit a fire.
"She has these strange ideas that fire can heal you - I think she thought it would bring Amelia back to life."
Single-mum Harris, who has two other children, was known to social services.
Her friend said: "She was a good mother and she absolutely adored Amelia - she was the light of her life."
Amelia was described as an "angelic" little girl who loved Peppa Pig and the colour pink.
A neighbour said: "She was a delight, always giggling and smiling. She was just a normal happy toddler who was usually dressed in pink.
"I'd see her out playing in the garden - her mum doted on her."
The family lived in a three-bedroomed new housing association property in Brithweunydd Road which was closed to traffic yesterday while police, the fire service and forensic officers examined the scene.
A South Wales Police spokesman said: "At around 10.20pm on Friday emergency services were called to an incident at an address in Trealaw in the Rhondda.
"A young child was declared deceased at the property and at this time the death is unexplained.
"Police officers investigating the incident have arrested a 37-year-old woman. She has been taken to Merthyr Tydfil police station where she is being questioned."