Yes, of course I would explain to your boys that he has autism. I don't really get your reasoning for not telling them. Hopefully your boys can learn some compassion. My son had a boy with autism in his class in first grade and second grade (different kids, different school districts) and I explained to my son about the boys, and even though maybe these kids had social issues, my son was always kind to them. I do believe he was more tolerant of any social awkwardness on these boys' parts then he would have been otherwise I hate reading the part of your first post where you had your kids tell the boy to go fly a kite, I cringe so much reading that. That seems so cruel to say things like that to a kid with special needs. One thing I've noticed, that you have never mentioned what leads to these situations with the little boy. You say that the boy calls your kids names, but what is happening to initiate these situations? Does he come up to them completely randomly and start calling them names, or is there some other interaction? Does he try to play, is rebuked, then calls names? There's never just one side to the story, so I'm curious as to how your children are interacting with him also, especially before the boy starts acting inappropriately. Maybe they are doing something that unknowingly instigates this little boy.
But definitely definitely I would tell your kids that this boy has special needs and explain what that means to them.