I got a phone call from daycare a while ago that one of my 3.5yr old twins punched a 5yr old and made him cry. What had happened was ethan was playing with some toy and then the older kid took it of him which lachlpan saw what happened and came over and started hitting the kid. I wasn't sure how to feel about it though. I was proud that he stood up for his brother against a kid older and much bigger then him. But obviously had to tell him it was the wrong thing to do.
Always a tough one.
In the past I have let the kids know its the wrong thing, even though I was proud on the inside.
I think the bullying thing is taken a bit far sometimes. Most bullies will stop after a smack in the face.
Happened to me in high school, kid used to rough me up a bit with his mates watching. Got him on his own and gave him a flogging. Fixed.