"She's at a mental health facility now so we're out of the mix," said Ventura County sheriff's Capt. Don Aguilar.
Witnesses said Bynes was spotted sitting on the ground in the driveway with her dog, who had been burned, and flames beginning to burn her pants.
She also entered a nearby liquor store, carrying her gasoline-doused Pomeranian, and tried to rinse off the soaked pooch. She then left the store with the dog, where she was tracked down by police.
Bynes was placed under a 5150 order -- involuntary psychiatric hold -- for 72 hours after police asked her questions and said she was unable to give comprehensible answers.
"I have no idea what she was doing," said Bonnie Braaten, in whose driveway Bynes lit the fires. "I don't even think she has an idea what she was doing."
Braaten, who was watching television in the back of her house and did not see the flames, said she thought Bynes's parents live nearby.
Bynes's parents are asking a judge to put their daughter under a conservatorship after months of the actress's increasingly bizarre behavior. Physicians at the medical facility have asked for a two-week extension on the 72-hour hold so they can properly diagnose Bynes.