All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His slave and Messenger.
The Scholars have three different opinions concerning female circumcision:
1- Some consider it a Sunnah (recommended act) for men and likable act for women. This is the opinion of Hanafi, Maliki schools and Imaam Ahmad as reported in a narration of his.
2-Others believe that it is obligatory on both men and women. This is the view of the Shafi'i and Hanbali scholars.
3-A third group thinks that it is obligatory on men and likable for women. This is the opinion of a group of Muslim Scholars.
From what is mentioned above, it is clear that no scholar has said that circumcision is prohibited.
As for how it is performed, it is done by cutting off part of the hood/skin which is like the comb of a cock and is found just above the urinary tract.
Umm Atiyyah said, “A woman used to perform circumcision in Madeenah. The Prophet , said to her: 'Do not cut severely as that is better for the woman and more pleasurable for the husband.'" [Abu Daawood]
Allaah Knows best.