my daughter is turning 5 this week and she likes to act like a dog. She crawls around, barks and wants to be pet. She knows there is a time a place for it, but my grandma thinks that she has a low self esteem and thinks she is no better than a dog. I do not think this is the case, since she is a fun, creative, active child.
Probably creative play, not low self esteem, especially if the child likes dogs. If she was pretending to be something she finds loathsome that might be a different story, but it sounds like she is having fun. I remember playing at a friend's farm when we were maybe 8, and we liked to pretend to be horses. We did it because we thought horses were strong and beautiful.