No doubt, as others have posted, it is time to terminate. If you are worried that she might bad mouth you to others, I would word the termination letter to the effect of
"....Dear DCM, it is with deep regret that I must terminate our contract. Special Snowflake is obviously gifted and at this point, I must recommend she be put in another more advanced preschool program. I cannot meet her needs. Regretfully,..."
Always ensure that your child receives quality care by taking the time to investigate the provider and by asking for references! We simply cannot verify the claims of every daycare provider.
Updates
We expect providers to keep their listing and available openings up-to-date. However, to prevent oversights, openings expire after 45 days.