2 year old avoids group activities

[Maaru]

My 2 year old doesnt take part in group activities or talk in daycare. It was about 6 months ago when she started daycare. She just stands and stares other children or plays by herself. When they are dancing and singing together, she also just stands there. When one-on-one with the teacher she speaks a little. When we go dancing-singing lessons together, she again just stands and watches the teacher and other children/parents.
At home and grandparents place she is very talkative and wants to do things together. She sings and dances etc. My mother in law is a teacher and she couldnt believe when I told her how my daughter is at daycare. Also I dont have any friends with children, so I havent done playdates. Could it be selective mutism?

It could be although I don't know a lot about selective mutism. Have Daycare raised any concerns with you? What's her speech and language like?

Or it could be entirely normal, until 3 ish going on 3 and a half or even 4 they play along side other kids but not with other kids - it's called parallel play. It's not till later they actually play with each other.

My DD who is a bit older than yours is very quiet at nursery and only occasionally let's slip that she knows far more words than she shows them normally. I know because nursery has told us they couldn't believe some of things she occasionally comes out with. At home she is an absolute chatterbox, it's honestly hard to get a word in! Your DD sounds fine to me.

She might just be on the shy side or wants to watch and figure out what's going on - that's not a bad thing. She could just be a little cautious again not a bad thing. I wouldn't be at all worried by what you have described.