BG that is a really tough situation. I was wondering if you could talk to your friend about your boundries in discipling the said child. Maybe your friend finds it hard given that it is her nephew and that she doesn't want to overstep her boundries with her brother. But you on the otherhand don't have that family connection.

Honestly if I saw a child doing the things you mentioned I would be tempted to say to him that he has to have time out from playing with the other children (whether he would listen or not is another thing) but I think you are in your right if the parents of the child are not going to step in to say that you don't push, hit, etc smaller children and that he needs to play elsewhere for a period of time until he can play again nicely. I really don't think the parents would say anything and if they didn well really a 4 year old picking on a 2 year old. My boys have been taught to say STOP, with the hand out (think its a standard daycare practice) but I do think that some older children wouldn't respect that especially coming from a younger child.

Good Luck with it all BG, I understand you are wanting E to stand up for herself but I think at 2 and with bigger children there is a really fine line given her understanding and also that fact that she could get seriously hurt.