Oh wow! My children want something to drink every day when they wake up. Water or water/juice combo in a sippy. A person's body, just from breathing loses water during the night. Also, water is pulled from your child's system at night to aid in digestion. Eventually, water is reabsorbed in the lower intestine, but then is excreted through the kidneys. Your child could lose water from mild perspiration while she sleeps. And finally, depending on the salt/sugar content of the foods your child is eating before bedtime, those things could pull water out of her body, into the GI tract. A perfect example of this is Apple Juice. It can be really high in sugar content. When ever my son drinks it, he gets a really watery BM. The sugar literally pulls the water out of the body's tissues into the GI tract to help flush out the sugar. Now I only use white grape juice for both my children, and I also cut the juice: 3/4 water, 1/4 juice. This can help them stay dehydrated.
Yes, there is such a thing as too much water, but your child will naturally be inclined to stop drinking before she reaches this point. Over-hydration usually involves forced drinking regimes, such as in the military (you may have heard about that at Fort Benning, on the news, where this happened). But your daughter is probably just rehydrating after a long night of busy growing during her sleep! :D No worries.