I could have written your post! I feel your pain. 
We have exactly the same problem with ds1 (10, with AS) and dd (4 next week and NT).
She is highly imaginative, will use any object as a toy and loves to pretend to be animals etc. Ds1 really cannot stand it and goes on and on at her - "you are not a dog, you are a little girl" "it's not a boat, it's a box" etc, etc - ad infinitum! Aaargh! Sometimes he gets really wound up and agitated by it and they both end up in tears.
We tell him not to do it every time. He knows he has AS and that that means he uses his imagination in a different way to many people, he knows that her behaviour is that of a 'typical' 4 year old girl and he knows it upsets dd, but it doesn't matter how many times we tell him, he will not stop doing it.
I think it does genuinely does distress him though, as he really cannot process why she is behaving the way she is and I have to keep reminding myself that it's hard for both of them and he's not just doing it to be mean.
The only other thing we do is read books about what it means to have AS together and keep up the dialogue about how having AS impacts on the way he thinks and processes things, so that he starts to understand that his way isn't wrong and neither is hers - they're just different and that they both have to be tolerant of each others' ways.
I also talk to dd in simple terms about how ds1 thinks about things a different way to her and that that's ok, but that he isn't allowed to tell her what she can and can't do.
Finally, we have a little conversation that we use on repeat with ds.
"Ds are you an adult?"
"No"
"Are you dd's parent, grandparent or teacher?"
"No, I'm her brother"
"Right then, well unless you are and adult and either her parent, grandparent or teacher - you don't have the right to tell her what to do, do you?"
"No, but .... she x, I just y, she z .... etc"
"No, the rules in this house are that only parents, grandparents and teachers - or anyone else those people give permission to can make the rules and tell the children what to do - OK?"
"Ok" (with added grump!
)
I wish I had the answer, all I can think of is to keep reinforcing the message over and over every time he does it, but blimey - it's like living in Groundhog day sometimes.
I will be watching this thread with interest.