S.D.
We battle with the same issue. My son is 7 and his friends have been able to explore the entire neighborhood since age 4-5. I just explain to our son that every family has their own rules and that we don't allow our young children away from the home unsupervised. I think the important thing is to follow your gut and not give in just because her friends are able to.
I personally think 8 is still too young to be 4 to 5 blocks away unsupervised. Maybe down the block or around the corner but not 4-5 blocks away.
I have issues even allowing our 7 and 5 year olds out front in our cul-de-sac unsupervised. Do you allow your daughters in the cul-de-sac unsupervised? My husband or I are always out there with them. If we're not up to being outside, they're in the house or in the fenced back yard.