I do call my Ds naughty, never really thought much about it. I can understand where your coming from but in saying that I call a shovel a shovel and if his behaviour is innapropriate or naughty I will tell him I think so. Usually when I say stop that its naughty or stop being naughty he knows he better stop otherwise theere will be consiquences. Dont remember if I was called naughty as a child but I was definatly smacked and prefer to use naughty rather than that. Guess were all different and use whatever works.
Interested in hearing more about it tho, if it is damaging to the child i had seriously never thought about it.