I time out

"I time out". Jonathan announced and sat on the floor as I was counting to 3 for him to come over and change his pajama to daycare clothes. I said OK and proceeded to organize his room. He realized something was amiss and declared, "No, you time out." So I sat down by him and did my time out. I started to sing his favoirte Gordon song. He told me,"No sing, you time out. I watch you." Oh mine. So I quit singing and sat and quietly got his pajama off and put on his regular clothes. He must realized by then that either nothing gets done or nothing really changes when mommy is in time out. He got up and said, "Go time."

I found it very comical with him telling me to do time out. In after thought, this was defiance. Well he is a little over 2 1/2 years old. Is this type of defiance to be ignored, punished or discussed? How much does he comprehend? How does one explain to a 2 year old that parents/teacher can ask him to do time out but not the other way around?