Play therapy is a playful but sincere psychological help for children. Play is something natural to children, and play therapy utilizes this proclivity, instead of speech to help a child express and heal. Play is the language of play therapy.
Here it would be useful to make a distinction between play and game. Play is spontaneous, with minimal of rules, allows full play of fantasy, and above all, it is non-competitive: there are no winners or losers in a play. A game, on the other hand, is rule-bound and is competitive. Any sport is a highly refined and specific version of game. Play is simply playful.
Play enriches the inner world of a child. It is a two way process: first a child imposes his inner world on to the toys, but as he plays on, through the natural evolution of play, attains a mastery which in turn modifies his inner world. Sometimes children, due to internal or external reasons, suffer psychological stagnation, which is also reflected in their play, and in situations like this therapeutic intervention is required, of which play therapy is a part.
Play is a lifelong affair, just the toys differ. Whenever something is spontaneous, fantasy-filled, and there are no winners or losers, it is play.
As a child grows, speech develops, self-awareness grows, play recedes in the background, and verbal language takes over the function of expressing oneself, but, for some people verbal language never attains this supremacy, they express themselves best through playfulness of dance, drama, painting, and sculpting etc.
In a play therapy situation, child is asked to play, but it is not a random play situation, the toys are carefully selected and there are well established norms as to what to look for and how. A therapist reads the play like we laboriously read an obscure book.
Play therapy is not detective work where some behaviour/action/theme serves as a stand-alone proof of something. What happens is the play therapy has meaning only in the context of all other information, like; parent's attitudes, socio-economic status, presenting problems, cultural background etc. This is not to say that there are no differences between the typical play themes and styles displayed by different groups along gender lines or diagnosis. For example, abused children display certain play themes which are not found with as much frequency in non-abused children.
Play therapy is very useful for problems related to anxiety, depression, withdrawn behaviour, bullying, and abuse. Play therapy research shows that its effectiveness is increased if parents are involved in the process, and when it is done for an optimum number of sessions.
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General References:
Children, Play, and Development. Hughes, Fergus P. SAGE 2009.
Play Therapy. Axline, Virginia M. Elsevier Health Sciences 1989.
The Efficacy of Play Therapy With Children: A Meta-Analytic Review of Treatment Outcomes. Bratton, Sue C.; Ray, Dee; Rhine, Tammy; Jones, Leslie. Professional Psychology: Research and Practice, Vol 36(4), Aug 2005, 376-390.
Play therapy with abused children: A review of the literature. White, JoAnna; Allers, Christopher T. Journal of Counseling & Development, Vol 72(4), Mar-Apr 1994, 390-394.
What the research shows about play therapy. Bratton, Sue; Ray, Dee. International Journal of Play Therapy, Vol 9(1), 2000, 47-88.

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