The 24-year-old local to the village of Waidhofen, Bavaria, was assisting at the parade and a member of the security team and was walking alongside the vehicle. Then, for as yet unexplained reasons, she fell under its wheel and was instantly killed.
Police believe that the death was an accident, saying that there is no indication that anyone pushed her.
Around 500 people were taking part in the small town parade, which involved 20 vehicles. Meanwhile thousands more onlookers, many of them families with children, attended the event. The parade was immediately stopped after the accident and around 50 people were given psychological care due to the horrific event they had witnessed.
Police are now investigating what could have led to the accident and have conducted an alcohol test on the driver of the vehicle.
Carnival parades took place in towns and cities across Germany on Sunday. The biggest parades are set to take place on Monday in Cologne, Mainz and Düsseldorf.