In the land of 2 and 3 years old "play" means all of us, as in foster mommies and their friends (us). "Hanging out," means alone with no foster mommies. This is the term they use, for example, when they are babysat, they are "hanging out" with the babysitter.
I never realized how much I use the term hanging out until recently. One the beach I innocently asked M (the 3 year old), "Is the giraffe hanging out with us," totally not thinking about the power of the words I just spoke. He looked at me terrified and physically backed off a little.
"...I mean playing, look he's playing with us."