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.
Differences in schools
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.
Dude, the Colorado school district's attorney, has said there is nothing in that state requiring public schools to permit transgender students to use restrooms intended for the gender with which they identify.
He added that the Fountain-Fort Carson School District adheres to the Colorado Anti-Discrimination Act in all respects: "Coy attends class as all other students, is permitted to wear girls' clothes and is referred to as the parents have requested."
She also has easy access to bathrooms other than the girls', Dude said.
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.
For now, the first-grader is being home-schooled.
Reaction to Coy's story
CNN's online audience has responded to this story with a range of questions and comments, with many saying the child is too young to comprehend gender differences. Mostly, posters said they felt sorrow for Coy as a child who is struggling.