Last night when I got out the shower I put the wet towel between my legs( vagina) and fell asleep. Forgot to remove it. So when I woke up this morning I immediately removed the towel and right after I begin to have irritation in the inside of my vagina. I began to experience itching. So I went washed myself again and it felt fine. So later on I looked and noticed that the inside of my vagina is a little bit swollen and a light light cream color discharge was there. Could this be because I left the wet towel down there overnight? Or could it be something else?

It could be from the water or soap. How some childeren get diaper rash from having a wet diaper same goes for this. However, it shouln't be a problem but.. If it stay's that way or get's worse I would have it checked it out it could have caused a yeast infection.

Possible yeast infection... I would perhaps go to your doctor to get checked out.