Is masturbation common?
Yes. It is a common childhood habit. Most children—both boys and girls—play with their genitals (external sex organs or “private parts”) fairly regularly by the age of 5-6 years. By age 15, almost 100% of boys and 25% of girls have masturbated to the point of orgasm. Estimates of the rate of adult masturbation are about 95-99% of men and 40-60% of women. Find out more about childhood habits and annoying behaviors.

How do children learn about masturbation?
No one has to teach a child to explore his or her genitals. It provides a feeling of pleasure, that once discovered, the child will most likely repeat. There have even been studies of prenatal ultrasounds revealing male fetuses doing it.

What do I do if my child is playing with their genitals in public?
Toddlers and preschoolers do not really understand the social implications of public masturbation, because, as noted earlier, they don’t associate it with private behaviors that occur between adults. To them, it may be no different than playing with their ears, twirling their hair or picking their nose (and you know they’re not shy about doing that in public!). Don't make a big deal out of it. Children enjoy attention of any sort, whether it is negative or positive. If you make masturbation into a big deal, you could end up reinforcing the behavior and actually getting more of it.

Children should never be punished or shamed for masturbating, as this can have major effects on their self-esteem and comfort with sexual activity as adults. There are lots of positive ways for parents to keep their kids from masturbating in public places:
##Set limits: explain to your child that it is a private activity, much like toileting, and should be limited to the bedroom or bathroom.
##Distraction: try to get your child interested in another activity with their hands.
##Send toddlers to their room to masturbate if they can’t be distracted from it.
##Ignore masturbation at bedtime or naptime and encourage your child’s daycare to do the same.
##Increase the amount of hugging, cuddling and parental affection you show to your child.
##Give your child a security object (teddy bear, doll, blanket) to take in public, since they may be using masturbation to comfort themselves in an unfamiliar situation.
##For children with developmental delay or other mental impairments who may not be as receptive to reasoning, positive reinforcement techniques may be helpful (for example, reward them for not playing with their genitals with special treats).
http://www.med.umich.edu/yourchild/topics/mastu...

when we noticed our grandson about the age of 7 we simply told him it's okay to touch yourself if it feels good but it is not something that you should do in front of other people If you want to touch yourself you should go to your room.
Do not make him feel ashamed, just impresson him that this is smething that should be done when you are alone. He's 10 now and we seldom see it - so he got the message.

Thanks everyone for reading & providing answers to my questions. We finally got in to see our pediatrician today and she said what he's doing isn't normal. We had noticed he was only seeing it for a few minutes a day but quickly discovered that this was going on for hours at a time. At the time I wrote this post I wasn't aware of the extent. But during the night he had done it for so long he had almost dehydrated himself and was swollen. After talking to him and talking to his older brother this had been going on in the middle of the night for a month. You would think his older brother would have maybe mentioned this before but he also has autism but wasn't sure what was going on, so he never said anything because he thought it was normal. He actually said he was wondering if he was weird because he doesn't do it or have the urge to. She told me he's perseverating and he probably needs an intervention like ABA therapy.

Well my son is older but I have walked in on him before, yikes. He is actually pretty good about doing it in private. But we took the lock of his door, now I knock and wait awhile to make sure. Maybe a privacy lesson about when it is OK to touch yourself and when it is not. 2 pictures maybe of one alone and one with people around and a big x through it.

Just wanted to say thank you for everyone who provided an answer, i learned something from everyone of them. We finally got my lil one's ABA therapy assessment!! I talked to the LPC/behavioral therapist about my son's masterbation & after asking questions, she said this is a sensory issue & should be addressed by his OT therapist.