I think just saying "stop" isn't working because you and your sister are not explaining to cousin what is wrong with her behavior and why it's not nice.
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I wouldn't go hard yet - as a PP said, 4 yr olds don't invent much, and I wonder where cousin is getting this language/behavior. Also though, is cousin the oldest? There may be unresolved "older child" issues where she feels threatened/upset at younger kids taking attention away from parents.
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Anyway, whatever the cause, maybe a 3 prong approach will work:
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1. As said already, don't leave your child alone with cousin at all until cousin shows real change in her behavior. Be there at all times your child is with her so you can address negativity.
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2. Explain to cousin, sometimes in front of your daughter when something has just happened, but maybe other times take her aside, and explain to her that her words are hurtful. Ask her how she would feel if people said mean things about her body/eating/whatever? And ask her if she's trying to make dd feel bad. If she says she is, try to process that with her, why? Does she like having her cousin around? Why or why not? That may help get more at what she's feeling. (Really, these are things your sister should do... would she be willing to talk to her daughter about this?) If cousin wants more attention or doesn't like your daughter being around for regular kid jealousy reasons, maybe have more structured playtime and play games that cousin can excel at and feel good doing, and your dd can also learn from and enjoy. And does your sister ever do things just with that cousin? More one on one time with parents can also help this behavior. Because then she may not feel in competition with your dd.
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If cousin continues to say mean things even when she knows it hurts dd, that is the time to get a bit more strict. "Cousin, you know that's not a nice thing to say and we don't say not-nice things. No one can have ice cream if you're going to be mean about it." or "You won't get dessert if you're going to say mean things to cousin". Where talking it through doesn't change the behavior enough, consequences often will.Â
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3. Talk to your daughter about how the things cousin says and maybe explain to her that cousin isn't being nice, and if dd feels bad about being around cousin, maybe you should limit their exposure to each other?