One of the most misused words in the English language is retard. This word has become a name to insult others and hurt their feelings. You expect this from children and you teach them the right way to speak to others. What do you do when an adult decides to call your child a retard?
The best answer for that is to ignore it. I mean, parents of autistic kids know better. We know that our children are not mentally retarded. In fact, many have above average IQ's. Even if they were "retarded" we would still love them to pieces and be completely offended if an adult called our child by that term. Even still, it is so hard to ignore it! You want so badly to defend your child that can't defend themselves.
This happened to me not too long ago. It wasn't a child that used this term, it wasn't a stranger, it was a so called family member. I know it was said to hurt me. She knows how important autism awareness is to me so she had to go down that path (among others) to get to me. I have to say it worked. I have not been that angry in a long time. It is easy for others to say to let it go, or you know better so who cares what they think. I care because so many people think this way and they are wrong. So many people think they can throw that word around and it's funny. It's not funny. It's also not an educated statement about autism.
All I ask is that people be careful about what terms they use to describe children. It doesn't only hurt the parent, but more importantly, it can hurt the child. The children we are raising to believe they can do anything and to know they are awesome.