I had a similar sized ovarian cyst at that age - it might help you to know what sort of cyst it is - mine was a 'benign dermoid cyst' - basically, the ovaries are prone to this sort of cyst because they are such special cells - capable of producing ever other sort of body cell.
The way the specialist explained it to me, the cyst began during my prenatal development. One cell turned into a 'skin' cell (hence the term 'dermoid') - and it grew in the ovary into a piece of skin - there was hair, oil, fat and even something that looked like a piece of bone or tooth...
Mine was detected around that age. I was in the very early stage of pregnancy with my second baby, and the ovary had moved (did you know the ovaries move around) until I could feel it just to the left of my belly button - when I lay flat on my back you could almost see a bulge in the skin...very strange...It was about the size of a golfball - so the same size as your daughter's cyst, 4-5cm diameter.
They did an ultrasound and measured it, made an 'educated' guess of what it was, and did not think it was a problem for pregnancy, and not urgent to have it removed, so I waited until my son was about 8 months old to have a lapaoscopic procedure and have it removed.
The surgery was very straightforward. Being quite young and still interested in having children, I did speak to the doctor about whether or not it would affect fertility, but he told me two things - firstly, you can still fall pregnant normally with one ovary working, so even if they completely removed one, everything could be expected to function normally as the other ovary would take over the job. Secondly, the egg cells grow on the outer surface of the ovary, and the cyst was inside, so they literally scraped the cyst out and then sewed the ovarian tissue back together again, and left it there...
Either way, when I did try to fall pregnant again, I had no trouble at all.
The laparascopy was in 2002. I chose a surgeon who was a gynaecologist and not an obstetrician - I was lucky in that my surgeon was actually a specialist on this procedure - I agreed to have other doctors there to supervise the operation for 'teaching' purposes and on the day there were about 12 doctors in the theatre...

They did introduce themselves very briefly but I was fairly out to it with pre-medication by then so I wasn't too worried.
The surgery was very straighforward, I went home just a few hours later...
The only thing that was really tricky was something they call 'shoulder tip wind pain' - it's common with laparascopy. I was explained as air below the diaphragm, like when you get a 'stitch' when running, but instead of your abdomen hurting, you get referred pain in your shoulder. What worked for me was keeping extra warm and having a heat pack across my stomach... and keeping my feet up...
Your daughter's doctor can explain the risk of leaving it in. For me the 'risk' is that it was not benign, but cancerous, or that it burst - causing the sort of scenario that oldhand spoke about. I have a friend who had one burst in her early 20's and it caused a life-threatening infection...and she was Type 1 diabetic so fairly high risk in that situation anyway, they mucked up her insulin/sugar after the surgery, and she nearly went into a coma from low blood sugar... so I'm certainly more comfortable with planned/routine surgery vs. an emergency situation.
Oh, the scars were tiny too - four tiny little crosses where the laparascope was inserted, and they removed the cyst through my belly button and then stitched it all up again... a little sunshine on the scars was recommended (not sunburn!) - to help it heal - and it really did seem to work...I'd be struggling to even find the scars these days amongst all the stretch marks from having three babies
Hope that helps....
PCOS is something very different.