Prosecutor Sue Baur said charging Cassandra Ann Kennedy of Longview might discourage other girls from reporting sexual assaults.
"This is the kind of thing that shouldn't happen," Baur said.
She noted, however, that it was simply a case of a person withdrawing their story - not an indictment of the system.
"Unfortunately, a man spent 10 years in prison before that happened," the prosecutor said.
Now 23, Kennedy said guilt prompted her to tell police that she lied in 2001 when she lived in Kalama, The Daily News reported Sunday.
"I did a horrible thing," Kennedy told detectives in January, according to a police report. "It's not OK."
Her father, Thomas Edward Kennedy, denied the rape allegation but was sentenced in 2002 to more than 15 years in prison. Now 43, he was released last week and all charges against him were dismissed. Reached Friday by the newspaper, he declined to comment, saying he's simply trying to get on with his life.
In recent months, Cassandra Kennedy has been staying at Mountain Ministries, a Christian addiction treatment center. Gary Miller, the organization's director, said she was in Mexico doing missionary work and couldn't be reached.
She told detectives this year that she wanted to talk about her father's conviction, according to investigative reports.
Kennedy told police her father never touched her. For nearly a decade, she said, he had been sitting in prison based on her lies.
"I just want him to be out and freed," Kennedy said in her interview with detectives. Then, she said, "I will be free on the inside."
Kennedy said she got the idea of setting up her father from a friend whose stepfather was sent to prison for a child sex crime.
"I thought that is what I would do to make my dad go away," she told police.
Thomas Kennedy and his wife divorced around 1991, and their daughters, Cassandra and her older sister, began spending one weekend a month with their father, according to court documents. The girls slept on foam mattresses in the living room of Kennedy's home.
"I wanted him to love me, and I didn't think he did at that time," she told the detectives.
Kennedy said she made up the rape story largely because her father disappointed her. "I took my own vengeance," she told police
The jury convicted Thomas Kennedy of three counts of first-degree rape of a child and the conviction had been upheld on appeal.