I think age and knowing our own child's abilities would lead me in my decision to observe or step in.
My problem with parenting labels is that they tend to cause people to think in extremes. Free range doesn't mean 'hands off', what it means is knowing your own child as an individual person, the level of responsibility they can handle and their level of social maturity. So, yes, if I have a 3 year old who is after another child's toys at the beach, I kindly corral my child back to me, remind them that we can bring our toys next time, and hey, lets go do this other thing. At the age of three, I cannot expect my child to politely wander back on their own.
I also am a strong believer that when you bring your own beach toys, no, you don't *have* to share. I find the expectation that everyone should share everything rather entitled. If you want your own, bring your own. Another family shouldn't be inconvenienced because of my family's poor prior planning, you know? Sometimes my son will offer to share with another kid he's interested in playing with, but he's not required to share with every comer, you know?
Sometimes, a fat lip or peer aggression is a hard lesson. I'd say some of the time, it can be informative of one's transgressions (hey, if I take Sally's block, she whacks me with that-- maybe I shouldn't take things from people)... but once again, most sane parents don't just dump their kid into a situation if they are unsure the child can handle it safely. Kids who push past the boundaries of other children can end up being hurt.
Then, again, to the contrary, I know children who have impulse control issues and even at older ages, those children need to have constant supervision when they are with other kids. Again, that is knowing the child.
I tend to be more relaxed with my son when I know he's with other people who are part of our 'village', who are comfortable with telling him how things are. For example, while we went camping with my sisters, he went off with his cousins on little adventures. The oldest is nearly 14, the other two 12 and 10--- all really great, responsible kids. Again, it's about knowing my son, the situation, and his ability to make good choices (say, knowing not to climb too high in trees).
I can't think of any more important framework to encourage social development in. Sometimes, peer correction, while rough, may be more powerful than mom telling you the same thing. I want my son to be able to deal with the real world, so I give him his freedoms where I can, when I can.