(CNN) -- A Colorado school's ruling over a transgender child has sparked questions that could affect schools all over the country.

Which bathroom should be used by a child who identifies as a different gender from his or her body? Where's the line between accommodation and discrimination? At what point is a child old enough for that to even be an issue?

The case focuses on Coy Mathis, a 6-year-old born with a boy's body. She identifies as a girl, and her family is raising her as a girl.

In kindergarten, she used the girl's bathroom with no problem, the family says. But this year, with Coy in first grade, the principal called to set up a meeting to discuss bathroom use. In advance of the meeting, the family asked what the policies are.

"We were told that there were no written policies and that the options would be for Coy to use the boys' restroom or the staff bathroom or the nurse's bathroom for the sick children, which were both on the opposite end of the building," Coy's father, Jeremy Mathis, said on CNN's "Starting Point" on Thursday.

That "would stigmatize her, having to be the only one having to go to a different bathroom, so we weren't OK with that."

The family contacted the Transgender Legal Defense and Education Fund. When an attorney with that group could not work something out with the school, the group filed a state civil rights complaint on the family's behalf.

In the meantime, Coy is being home schooled -- partly because her parents fear bullies may make fun of her.

"The district firmly believes it has acted reasonably and fairly with respect to this issue," the school district's attorney, W. Kelly Dude, said in a written statement. "However, the district believes the appropriate and proper forum for discussing the issues identified in the charge is through the Division of Civil Rights process. The district is preparing a response to the charge which it will submit to the division. Therefore, the district will not comment further on this matter out of respect for the process which the parents have initiated."

The school calls Coy a girl as the family wishes, Dude said.

When "his male genitals develop ..."

The school laid out some of its argument in a letter to the Mathis family's attorney in December:

The district "took into account not only Coy, but other students in the building, their parents and the future impact a boy with male genitals using a girls' bathroom would have as Coy grew older," the letter said.

"As Coy grows older and his male genitals develop along with the rest of his body," it said, "at least some parents and students are likely to become uncomfortable with his continued use of the girls' restroom."

Kathryn Mathis, Coy's mother, rejects that explanation. "The immediate problem with that is we're not in middle school yet, we're not in high school yet," she said Thursday. "And they're punishing a 6-year-old for something that hasn't happened and may not happen.

"Her body development is none of their business. That is up to her and her doctors in the future. That's not something that we're at right now. And right now we need to be protecting a 6-year-old, not a middle-schooler or a high-schooler."

Coy sat with her parents during the interview with CNN.

What establishes discrimination?

Colorado law prohibits "discrimination in employment, housing and places of public accommodations against an individual based upon actual or perceived sexual orientation. Sexual orientation is defined as heterosexuality, homosexuality (lesbian or gay), bisexuality, and transgender status. Transgender status means a gender identity or gender expression that differs from societal expectations based on gender assigned at birth."

It does not explicitly state that a transgender individual should be allowed to use a bathroom for people of the gender with which that individual identifies.

Dude, the Colorado school district's attorney, has said there is no such requirement for public schools.

But Jeremy Mathis told CNN he believes "the wording of the law is very solid, and I believe that they're in direct violation of it. They are, in fact, discriminating."

"Forcing her to use a separate bathroom from all the rest of the kids or forcing a little girl to go into he boys' room," he said, is "not OK."

Coy's case will be the first to challenge a restroom restriction under the state's anti-discrimination act, the Transgender Legal Defense and Education Fund said.

Coy's passport and state-issued identification recognize her as female.

"For many transgender people, discrimination is a daily part of life," says Michael Silverman, an attorney with the fund. "Unfortunately for Coy, it has started very early."

"The world is going to be looking at the school," he said, adding that the case can "send a message to the world and teach tolerance, fair play and equal rights."

A little-studied group

Transgender children experience a disconnect between their sex, which is based on their anatomy, and their gender, which includes behaviors, roles and activities, experts say.

For the general public, transgender identity may be a new concept, though many might recall Chaz Bono, the child of entertainers Sonny and Cher. Born female, Bono underwent a transition in his 40s to become a man. He wrote in his book "Transition" that, even as a child, he had been "aware of a part of me that did not fit."

He appeared last year as a man on "Dancing with the Stars," in part, he said, to destigmatize being transgender.

Comprehensive data and studies about transgender children are rare. International studies have estimated that anywhere from 1 in 30,000 to 1 in 1,000 people are transgender.

Some children as young as age 3 show early signs of gender dysphoria, or gender identity disorder, mental health experts who work with transgender children say.

These children are not intersex -- they do not have a physical disorder or malformation of their sexual organs. The gender issue exists in the brain, though experts do not agree on whether it's psychologically or physiologically based.

Many transgender people report feeling discomfort with their gender as early as they can remember.

Gender identity is often confused with sexual orientation. The difference is that "gender identity is who you are, and sexual orientation is who you want to have sex with," said Dr. Johanna Olson, a professor of clinical pediatrics at the University of Southern California, who treats transgender children.

Children around age 3 are probably not interested in sexual orientation, she said. But experts say some children who look like they will be transgender in early childhood turn out to be gay, lesbian or bisexual.

School policies toward transgender students vary across the United States.

In New York, for example, the law says students can't be discriminated against on the basis of their gender identity.

But in Maine, a court ruled in November that a school district did not violate a transgender student's rights when she was told she couldn't use the girls' bathroom.

Reaction to Coy's story

CNN's online audience has responded to this story with a range of questions and comments, with many insisting the child is too young to comprehend gender differences. Mostly, posters said they felt sorrow for Coy as a child who is struggling.

"Just let the kid use the gender-neutral bathrooms. When he/she is a teen, if he is still convinced he is a girl, maybe then you can get into it with the school," said commenter EDM.

"This kid is going to have a hard enough life if he really is transsexual, why start fighting battles now, when he should just be blissfully ignorant"?

Commenter AlawJ said the story left a "negative impression of the parents."

"My rash view may be unfair, but I remember being that age and have helped raise 9 nieces and nephews. One wanted to be a firetruck and ran around making truck noises. Another one of the boys liked to play dress up with the girls," AlawJ wrote. "My fiance's little brother always wore dresses as well. But, at the end of the day, the parents are there to be the adults and make decisions for them.

"I also am a little weary when you read a story where the parents are filing lawsuits for their 6 year old child's rights."

CNN's Cristy Lenz and Madison Park contributed to this report.