My four year old girl imitates parents behavior. She likes to keep things from younger two years old sister and tell her if she doesn't behave well she won't get back her toys.
Most children learn by example. If you don't like what you are seeing, then perhaps you could consider how you discipline. This is perfectly normal behaviour for a child -- they are little mimics, and it can be quite daunting to see yourself reflected in their actions.
In the meanwhile, you could try gentle redirection. Redirection means (more or less) changing the subject. As your elder daughter starts to discipline the younger, you redirect her/them by suggesting a tidy-up or going for a walk or using another toy, or turning up the music and dancing or singing.
If, by chance the elder was correct -- the younger was doing something potentially harmful, model how you want to see the problem handled. Modelling is how your elder child learned this is the first place, so you already know it's effective.
Otherwise, as it is normal, think about it as another set of eyes. Your younger daughter is more likely to be safe and entertained simply because her older sister is being a 'good parent'. Little children often play 'house' or 'family' games.
