Late to the party, as usual…
There was something about small parts too…safest way to avoid trouble there is to mark your products suitable for ages 3+.
Changed to 12 and under … apparently the Consumer Product Safety Act was “improved” in 2011.
So, if a “child” is 12, or under, defining “Children’s Products” is a major issue; electronic “toys” contain lead solder, children’s books contain ink (and residual solvents), etc. One thing is guaranteed though, the up-swell in third-party testing labs, the Consumer Product Safety Commission (CPSC) budget ($130M this year) and employees hired to watch all of this are in making money…
I haven’t read through this yet, but The Hand Made Toy Alliance would seem to be a good resource.
edit- not sucha good resource, but more of a place to vent frustration, and an avenue to change legislation… 
Sheesh… how did Gepetto ever make a living?