I let my son make decisions about his hair when he first expressed an opinion about his hair. Short of asking for a mohawk or wanting to color it, I can't imagine having a problem honoring his request ... though I always reserve the right, and he knows that.
I first read your post last night, and I still can't seem to figure out what 'Let your hair find it itself' could mean. My best guess is that some styles are better suited to thicker hair vs, thinner hair or naturally curly hair vs. straight hair. I just can't imagine she meant that one day your hair would "mature," and that a haircut you got when you were younger would somehow interfere with that process. I'm just really struggling to understand what it is that you think your cousin meant.
Who among us has not had a haircut that they regretted ... or at least that made us say, "Ok, I'm not going to ask for that again!" I have had short, short hair cuts before (once to the point that I thought it looked like a boy's haircut ... which I was not happy about). They've all grown out completely.
Other than my grey hair, nothing about my hair has ever changed or "matured," no matter how many hair cuts I've had. I really see no harm in letting your daughter at least have some say in how her hair looks.