Non-Existent Sim Showing as Daughter

I know this can happen with Ambitions if you use a time machine with "Woohoo in the past" or "Woohoo in the future"

This can sometimes result in a child being born in the other time.

In the past, sometimes you will have an adult child (or descendant) drop by shortly afterwards and then usually immigrate to the world if there is an available slot for them.  If not they'll just run off and never speak to you again.  Either way they land in your family tree.  In the future it can appear in your family tree, but I forget the particulars.

Another case is if the child is listed as only being a child of the sim you married and the other parent being unknown.  Since children default to the mother's custody in The Sims 3, if the Sim you married is male it may not be seen.  This will normally appear when the sim moves in and you gain access to the family tree info.  However, sometimes a malfunction can be corrected when moving between worlds, or when recovered by a mod such as Overwatch, which will recover said sim if it finds the relationship data somewhere else.  If overwatch can't find the other parent it will name it as the best match, which the current spouse.

A final case is if you took over an existing family the adult child might exist, be moved out and have left town. Sims do leave town.  Usually due to there being too many sims for living arrangements, or based on the total sims in town exceeding the number the game thinks your computer (or the computer of the person who created the custom town) can support. 

It looks like your town is VERY small by the number of sims in the town, so yeah, they probably just left town due to there not being room.

As of solutions if it REALLY bugs you that you have an estranged family member the solutions sadly require mods.  You mentioned having overwatch installed.  If you have Master Controller installed as well, you can just total annihilate the sim to make it vanish.

If you want to get the sim to move back in with you, if the relationship still exists you can call them on the phone, and invite them over, then ask them to become roommates.  Depending on how their life situation evolved by the background manager they may turn you down.  (Specifically if they are in a romantic domestic relationship.)  However, in the vast majority of cases they will accept if you get them to best friend status.