Lol boys are so cute, hehehe My DD1 has taken to fiddling with herself as well, I'm trying not to make a big deal out of it because I remember my mum hitting the roof the (lol multiple) times she caught me out :/
I just tell her it's not very nice to do it in front of people, she should do it in private, and that she shouldn't do it too often because it will get sore (which it has lol). That, or sticking a pair of knickers on her instead of letting her run around nudie, she soon finds other things to occupy herself with