Blest With Sons asks a very thought provoking question.
Since the answer I am going to post is rather long I
decided to do it here instead of as a comment to her
post.

Actually, there is a greater issue here even than the
question about which issues/behaviors in our children
we can relax about. It is the idea you brought up
yourself in relating your conversations with your
mom. How can we allow our children to have the
experience of unfettered alone time?

All behaviors can be let go to some point. And none
can be let go to an extreme...but you already know
that. The true question is how can we give our
children the freedom to be alone to dream and pretend.
And along with that, how can we give them unsupervised
(by adults) time with other kids, so they have to
work out squabbles on their own?

I, too, had much freedom as a child. There were countless
hours alone or with my friends riding bikes, walking the
neighborhood, and playing games. But, as you know, the
world is not as safe as it was then. So, the crucial question
is how can that kind of time be offered to our kids in a safe
environment?

I don't have specifics for you. You know your neighborhood,
your kids and your feelings as no one else does. I do know
that for our family it has been wonderful to move to the
country. Our boys have been able to spend hours in tree
stands, on their four wheeler, walking through the woods to
the creek, and we have felt safe with that. Of course, they
didn't do this when they were four, but they could by the
time they were 13. Somewhere in there they made the
transition. But when they were four they were encouraged
to go outside, or to their room, to spend time alone in play or
just daydreaming.

You are being a good mom by keeping the little nippers under
close supervision. I would encourage you, though, to stand back
a little longer sometimes to see how far they can go in working
out problems. Talk to them ahead of time, when they are
going to be with friends, about how to behave (as if you didn't
already.) Talk to them afterwards about how things could
have been handled differently. But don't feel bad about
intervening if you need to.

And above all ask for the God of all wisdom to give you
wisdom in knowing when and when not to let out the reins.

I have more thoughts on this subject, but "enough is as good
as a feast" as Mary Poppins says.