A woman is due to face court after allegedly stabbing four people, including her five-year-old daughter, at Salamander Bay near Port Stephens.

Key points: The young girl is in hospital and is being treated for lacerations to her skull

The young girl is in hospital and is being treated for lacerations to her skull Witness described trying to lock the woman in a supermarket where she allegedly attacked strangers

Witness described trying to lock the woman in a supermarket where she allegedly attacked strangers Police said the knife the woman used was in a protective sheath

It is alleged the 26-year-old woman and her young daughter got into the backseat of a car, that was being driven by a man and had his 15-year-old-daughter inside, which was stopped at an intersection late on Tuesday afternoon.

Police said the woman stabbed the man with a knife which was covered by a protective sheath, causing minor cuts to his shoulder, before she and her child got out and walked into a nearby supermarket.

Members of the public confronted the woman, including a man holding a chair.

Superintendent Craig Jackson said the actions of the public prevented any further offences.

"A five-year-old girl suffered multiple stab wounds by her mother; you can imagine the trauma," he said.

"There were a number of members of the community attacked by the woman.

"They took actions where they locked the still-violent and armed offender inside the grocery shop, and I think that probably prevented further offences."

The woman walked into the supermarket after allegedly attacking a man in his car. ( ABC News )

A 44-year-old man walked out of the grocery store and attempted to talk to the woman before she allegedly lunged at him with a knife — which was still in the sheath — striking him in the chest and back and causing minor lacerations.

She then walked into the supermarket and was locked inside by witnesses.

The alleged offender then chased a 50-year-old woman around the store and stabbed her in the back.

She then allegedly took hold of her five-year-old daughter, stabbing her in the head several times before dragging her through the store by her hair for a short time.

"She lunged at the guy walking in," witness Garry Price said.

"We held the door shut until the police came but three times we tried to open [it] to get the little girl out.

"And then the fourth time we opened the door and grabbed the knife, she had dropped it."

Police arrived shortly after and during her arrest she allegedly punched an officer and also attempted to self-harm.

Witness Garry Price said bystanders tried to open the supermarket doors to get the little girl out. ( ABC News )

The woman was taken to The Mater Hospital for treatment and assessment while her daughter was taken to John Hunter Hospital for treatment for several lacerations to her skull.

Lana Steane, who knows the woman, was devastated.

"This is a really nice, quiet community," she said.

"What I've known of her, she really is a beautiful person and it's really a shame that this has happened to her and her young daughter."

After being treated the woman was taken to Raymond Terrace Police Station and charged with 11 offences.

During an appearance in Newcastle Local Court on Wednesday afternoon, Magistrate Peter Barnett heard the woman had received a mental health assessment and was not deemed mentally unwell under legislation.

No pleas were entered and the woman showed no emotion, but squinted and appeared to be trying to focus as her case was adjourned to next week.