They begin earlier than you ever thought possible. I have proof with the following actual conversation between two four-year olds:
Audrey: BEN, I heard what you said!
Ben: (totally confused) What?
Audrey: You NEVER call my brother an idiot EVER AGAIN!
Ben: I didn't call your brother an idiot!
Audrey: Yes you did! I HEARD you!
Story behind the conversation: All three were sharing a bowl of dried cereal. Nolan (Audrey's brother) had dropped a piece of cereal on the floor. I didn't know it had previously been in Nolan's mouth prior to asking Ben to pick it up, which I did only because he was the one standing closest to it. He picked it up and said, practically throwing the offending piece of cereal at Nolan, "Ewww, you eat it," and not, as Audrey thought, "YOU IDIOT!"