Playing Doctor?

[sahm2three]

When do you intervene? Here is the backstory: We have a little boy who is 5 who I have to keep my eye on ALL THE TIME. He has asked kids to pull down their pants and I caught him telling one of the two year olds to pull his pants down and put the play shot thing "in his butt". Now, that could have meant to give a shot in the butt cheeks like a doctor does, but he chose to hide on the floor behind the table and chair set and tell her to lean down and hide with him. So now all the kids are trying to pull their pants down and shirts up to "play doctor". I do not want any parents to think anything is going on here, so I have told the kids to play doctor on the baby dolls only. There are two 2 year olds who insist on doing it on eachother, and no matter how many times they are made to sit out from an activity for not following the rules, they continue to do it. And if they are both here, that is ALL they want to do. I am not sure how to deal with it further. If I just let it go, off come their clothes. Any ideas?