The mom with the 5-year-old adopted from India, who has not yet told her daughter she's adopted. It's been kind of easy to get away with this so far since your husband is Indian. But I think it's important that you tell her ASAP! I gave you the link to the blog in the hopes you'll stop by, but I wanted to give some quick guidance to you and others who've delayed talking about adoption -- I know you're not alone in this!
First of all, why tell? Openness and honesty are FUNDAMENTAL to healthy relationships, and that includes the relationship between parent and child. I'm sure you think your daughter is too young to understand, and you're right -- she won't understand completely at first. But I bet she's already overheard a conversation or two (we talked about it pretty openly, so I'm sure it's not a deep, dark secret, and I'm sure you've had to explain your relationship within her hearing more than once!) that makes her wonder and worry that there's some secret about her that no one is telling her. And if you wait too much longer, she's going to be hurt and angry at you for keeping it from her. She'll likely put a very negative connotation on it all, since things that are secret are usually thought of as things that are bad.
Second, how to tell? Take a look at these posts for some tips: Talking Adoption Tips and Ten Commandments of Telling. I hope they'll help to get you started. Opening up discussion with a story book is great, so here's an Adoption Book List for you. You might also want to read the book, Talking to Young Children About Adoption. And check out the links to the right, Resources for Adoption Talk. Quick tips -- be positive, be as casual as possible (don't make it a heavy family talk, I mean), and be prepared to give lots of reassurance.
Third, what to tell? Think about where your child is developmentally. Do you have a pregnant friend? Has she seen pregnant women and known there's a baby in there? I'd probably start with pregnancy at her age: "Remember Mrs. XXXX, who has a baby growing in her tummy? Giving birth to a baby is one way to add a child to a family. Adoption is another way. Do you know what adoption is? Adoption is when a child's birth family can't take care of her, so they make a plan for another family to take care of her and that other family becomes her family forever. Adoption is how you became a part of our family!" And then follow where it goes from there.
Best of luck! And I know it's always unbelievably cheeky when total strangers give parenting advice. Sorry about that. But this is really, really, really important for your daughter, who was a cute as can be, smart and engaging and outgoing, and deserves the best!