Translation:The girl drinks milk, the woman drinks water.
Niña certainly means girl. It's just that in the context here it's certainly referring to a girl, so that is more appropriate.
The problem is when the English "child" is translated into Spanish, there is no exact equivalent; strictly speaking, there are no gender-neutral words in Spanish (even objects, & abstract ideas, like professions), which is why if a sentence does not give enough clues, we'd be forced to pick between "niña" or "niño" for "child".
But doing the opposite; translating "niña" to English, that should always be "girl". Perhaps it was a mistake on DuoLingo's part to encourage "niña" be translated to "child".
(Anyone feel free to correct me if I'm wrong)
Whatever. They're the same but there was only one possible solution in this particular situation that's the reason why it's the right answer. I guess the other one would be correct as well because you cannot make difference between tenses in Spanish like you do it in English... Hope I helped you. Greetings.