When my two year old twin boys say no to me, two things happen.
They don't get punished. They do get practice.
You see, I want my children to say "NO" to me. Why? Because the way I see it, there are two vital things being learned and practiced.
First, they are learning the fine art of negotiating.
"Gus, will you come here please?"
"I need to change your diaper."
"No, I playing."
"Ok, you can play while I count to five and then you can come here."
"Sure, I will count to ten before your diaper change."
Of course, it's not always this easy. And often I have to rephrase an accidental question into a statement. Really, if I don't want an answer I shouldn't ask a question! So "Do you want to eat dinner?" has to become "It's time to eat dinner."
Second, when my boys tell me "NO" they are practicing standing up to an authority figure. I do not want blindly compliant children. I want them to be able to refuse an older child or an adult who is asking them to do something that is inappropriate or makes them uncomfortable. If they learn at age two that they are allowed and encouraged to say no, then it is my fervent hope that they will have the strength of conviction to say no when they are out in the wider world.
To be clear, I do not allow my boys to walk all over me, or to rule the roost. There are boundaries and limits that are in place for the benefit of everyone in our household. But if someone in our family disagrees with something, it will be heard and discussed.
Saying "No" is powerful. Being able to say "No" without fear of punishment is empowering.