As you know, british citizenship by descent cannot be automatically passed to children. In order for them to get citizenship, you will need to apply to register them as british citizens. There are a number of categories under which you can register them. One if outlined above but there are others in particular the catch all category which has no specific requirements but where you send the Home Office detailed reasons why you believe your child should be registered and they then decide whether to grant citizenship or not. They will look at factors like the age and circumstances of the child, where they (or you) intend to make your permanent home (ie the UK or abroad), how long the child has been in the UK, family connections or other ties to the UK etc.
If they are satisfied that there are sufficient compelling and compassionate reasons for registering the child as British then they will do so even if the family circumstances don't quite fit exact requirements (for example having satisfied the 3 year residence requirement which usually should be the 3 years prior to the birth, not just any 3 year period within your lifetime and over 20 years ago).
It doesn't sound like your child is currently in the UK and so this is likely to be the first problem that you will encounter. The Home Office are not likely to believe that your child (or you) intend to make the UK their permanent home if you are not actually here at the time you make your application. The Home Office will therefore probably not see why there are compassionate circumstances requiring the child to be British if they are living perfectly happily out of the country.
If you have not lived in the UK for over 20 years, why do you want your child to be British? If it is just so they can travel to the UK when they are older if they want to without having to get a visa, this is not likely to be viewed as a significantly compassionate enough reason for them to register your daughter as British. If however you do intend to make the UK your permenant home as soon as your daughter is old enough to travel safely and you have family here etc then this might.
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