L.K.
My daughter started doing this at 1 1/2 and is still doing it at 5 1/2. I have talked to her about it and told her I understand the need to feel good and self soothe but that rubbing herself is not proper out in the 'open'. She would do this in her daycare during nap and the teachers would get uncomfortable. She did this in front of relatives, guests, you name it. VERY embarrassing. I've now told her that she needs to go to her room or be around NO ONE. I don't want her to NOT do it if needed or to be ashamed of her sexuality.... as I was NEVER talked to about it, but I also want her to understand what is 'proper' and not in public places or around her baby brother or other family.
I am not the most private person or modest but there are some things that need to be done in a private setting. I do not feel I am punishing her by sending her to her room, but hope I am teaching her how to live in society without having ridicule.... esp since she will be entering Kindergarten this year.
Good luck. I feel the embarrassment and concern.