(1) There are different kinds of memory:
- a "sensory" (e.g. visual) memory of events as they happened
- a verbal memory, i.e. the knowledge that something has happened (verbalization being the result of higher cognitive processing or "reflection")
- a behavioral memory, i.e. a specific reaction to certain stimuli that does not appear in individuals that did not experience the relevant trauma
The purposes of memory are correct and efficient future behavior. A detailed sensoric memory is not helpful in achieving these purposes, so it is usually not retained.
Verbal encoding becomes more likely in older children (older than 28 to 36 months) and is better in girls. Children of all ages preserve a behavioral memory. (Terr, 1988)
(2) Traumatic and negative life events are less well remembered than positive life events (Byrne, Hyman & Scott, 2001), and it seems that memory is correlated to the type of trauma. In one study (Williams, 1994), 38% of abused women had no memory of that (documented) abuse. Forgetting the abuse was more likely, if the perpretrator was part of the girls family. I would interpret this as the trauma being more severe, if the child's trust was broken. Forgetting this may be a coping strategy (see 3, below).
(3) Forgetting of traumatic events seems, in part, to be due to these traumatic events to "fall out of" and "not fit into" the individuals world view (Janoff-Bulman, 1989). Whenever we experience something new, we have to either adapt our idea of the world to include this new experience, or we can, among other strategies, deny, ignore, or simply forget, that it happened. In the case of childhood abuse by close relatives, accepting the event as a fact, would result in the child loosing its family and all trust in the world. It would be unable to survive. Forgetting the trauma maintains a world that can be lived in. Deliberate forgetting can be found in victims of genocide (Buckley-Zistel, 2006). Forgetting can be willfully induced (Joslyn & Oakes, 2005).
There's a wealth of research into forgetting of traumatic life events.