The woman, Mini, was arrested following video footages aired by news channels, purportedly showing her assaulting a two-year-old child at the facility.
Mini has been charged under relevant sections of IPC and other Acts ensuring child rights, they said.
The video was recorded secretly by parents following information that the woman intimidated and assaulted the kids after their parents dropped them off at the daycare centre before they left for work.
The children were hesitant to go to the facility due to the cruel treatment meted out to them by Mini, parents said.
Various organisations including Youth Congress and Yuva Morcha, the youth wing of the BJP, held protest marches towards the institute.
State Child Rights Commission has sought a report from the state government, police and Kochi City Corporation.