Personally, I don't call my DD a princess, nor would I let her wear clothes that say princess. Occaisonally others will say "hello princess", but I just ignore it.

My reasoning is that I feel that calling a little girl a princess is teaching her that she is "royalty", deserves special treatment, has others serve her and gets her own way. In my parenting style, I am big on teaching that we need to learn to help and be kind to others and that it is a good thing to "serve" others. I love my DD obviously, but I don't want her to think that the world revolves around her and her needs.