**Core Concept**
Sexual differentiation in humans is a complex process that involves the presence or absence of specific genes, hormones, and anatomical structures. By the age of 2-3 years, most children can identify their sex and exhibit stereotypical behaviors associated with their gender. This is largely due to the influence of sex steroids, such as testosterone and estrogen, on brain development and behavior.

**Why the Correct Answer is Right**
Research suggests that children as young as 18-24 months can begin to differentiate between male and female, and by 2-3 years, they can accurately identify their own sex. This is thought to be due to the presence of sex steroids, which influence brain development and behavior. *Testosterone, for example, is known to promote masculine behaviors and characteristics, while estrogen promotes feminine behaviors and characteristics.*

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect as there is no established age by which children can accurately identify their sex.
**Option B:** This option is incorrect as it does not accurately reflect the current understanding of sexual differentiation in humans.
**Option C:** This option is incorrect as it is not supported by empirical evidence.

**Clinical Pearl / High-Yield Fact**
It's essential to remember that sexual differentiation is a complex process, and individual variations can occur. Healthcare professionals should be aware of these variations and provide sensitive and supportive care to children with differences of sex development.

**Correct Answer:** C. 2-3 years