Yesterday I was chatting to a mum at school who was upset because her DS called her DH an idiot.
I'm pretty sure he probably picked it up from my DS, who has heard me muttering it while driving and sometimes I berate myself and call myself an idiot. Both boys are three, I think it's fairly inoffensive and wouldn't tell my DC off for saying it, in fact had a chat with DH and said no matter what the word if used in the correct context we aren't too bothered.
Is this a bit laissez-faire? My children have excellent vocabularies and are exploring language so I might ask if they understand the meaning of the word but never ban its use.