There is, of course, a limit to how much a daycare setting can tolerate of such behavior, because they are responsible for the safety of the children. In an ideal world, they would start him off each day for now playing by himself, and then permit him to play alongside one other child. Large group interaction should be avoided for now. At the first sign of any aggression, and an adult should always be close by, he should be placed in time out for approximately ten minutes. At the conclusion of the time out he should, once again, play by himself. At home, it does make sense to sit him in time out in the wake of any such behavior, but the time out period should be fairly short (10 minutes or so is sufficient at his age). It's probably not useful to confine him to his room, but privileges such as viewing TV or playing outside can be withdrawn for the duration of the day. Children so youn benefit primarily from the immediate consequence that follows in the wake of the misbehavior.