DS started getting in touch with his feminine side at about 3 or so, perhaps a little younger. He loved Madeline, Laura Ingalls, Dorothy, Pippi the lot. He has always been taken with strong female characters. He dressed up frequently in dresses and if he was comfortable and wanted to go out like that, I let him, no questions asked, no worries.
He reached an age (5 or so) when he started to clue into the social environment (just happened naturally) and would choose to change before he left the house (and redress when we got home if he liked). However, he DID dress up as a witch for Halloween that year because he was "in love with "Mildred Hubble" (Worst Witch).
For me, I never wanted to give DS the impression that there was anything wrong with dressing like a girl if he wanted to (he was just as likely to be a bunny, or a tiger or a dinosaur--he was ALWAYS something, ALWAYS in character). His lean toward the feminine however, was strong enough that I wondered if this wouldn't be an on-going issue for him and more than anything, I wanted to convey my unconditional acceptance. I figured, at the end of the day, we can't control what other people are thinking (or saying!), but we can control how we feel about ourselves. I felt it better to allow DS to be confident in himself and learn some healthy resilience than to modify his actions in accordance with societal "norms" if you will. More important for DS to be confident in who he is.
He wouldn't go out in a dress now (I don't think), but he'll still occasionally like a character in a book or film enough to put on the dress at home... KiKi from KiKi's Delivery Service is recent one that comes to mind. Of course, because he wears his hair long and prefers light, close fitting clothes (leggings rather than sweats or jeans), he's mistaken for a girl ALL THE TIME. It doesn't bother him. What does bother him is if I don't gently correct people. Sometimes he'll do it, but often he's a little shy about it so we have a deal that if he doesn't speak up, I do.
When DS was younger and his hair was shorter, he was clearly a boy dressed as a girl. We rarely received any criticism/looks. In fact to date, I can only thing of one or two times his dressing or looking like a girl has brought criticism and that was from my own MOTHER. *sigh* But DS, bless his heart, didn't take it personally and proudly remarked, "My mommy made me a dress from one of her old shirts" and "I LIKE MY HAIR LONG GRANDMA! If it doesn't bother me, it shouldn't bother you." Amen.
What we've found is that most people (if they are secure in themselves and open minded) have no problem with this and we've received a number of truly sincere positive comments through the years. When we got some new neighbors a few years ago and our what they knew to be "our son" was parading around the yard as the one of the "Rainbow Fairies" our neighbors, a young married couple (30 or so) gave DH and I "the thumbs up" sign when we were heading out in the car one day. It was very sincere in a "he's a cool kid" kind of way and I admit, it was nice for someone other than DH and I to really appreciate this special thing about DS.
My .02 for what it's worth.
P.S. Sorry, this got really long...