The bulk of this post has been re-posted on Crunchy Moms. Click here to see it.
When something goes wrong
Keep your thoughts inside as much as possible when confronted with a report from your child. If you over react, you might frighten your child and he or she might not discuss it more.
Investigate odd behavior
This is particularly important with nonverbal children. You know your child best, so watch for changes in behavior. Especially of concern is a sudden changes in how a child reacts to an individual. Masturbation is not an odd behavior unless a child frequently for goes regular play to do so.
Expect curiosity ...
It is natural for children to be interested in their bodies and the bodies of others. Masturbation is normal. "I'll show you mine if you show me yours" or "playing doctor" is also normal with young children of the same age.
But watch for games with inequality in power
Even between children close in age, games where the power is not equal are concerning. For example, a stronger, smarter, or more popular child leading a game of "doctor."