Short answers, pulled from the story.
The Oxford English Dictionary defines role-playing as the changing of one's behaviour to fulfill a social role. In psychology the term is used more broadly, covering theatrical performance, educational settings, role-playing games, and formal research methods.
The teddy bear hospital is a roleplay strategy in which pediatric and nursing medical students act as teddy doctors for children who act as the carer of a soft toy requiring consultation. It is used to reduce children's anxiety, improve patient outcomes, and help medical students better understand young patients. Programs exist at dozens of universities and medical facilities worldwide.
Viola Spolin and Keith Johnstone developed the theatre games that launched modern improvisational theatre in the 1950s. Spolin was one of the founders of the comedy troupe Second City and was using role-playing exercises in her games as early as 1946.
Psychologists assign research participants to particular roles and instruct them to act as if specific conditions were real, then study the resulting behaviour. Kurt Lewin used this technique in 1939, Stanley Milgram in 1963, and Phillip Zimbardo in 1971. Herbert Kelman argued in 1965 that role-playing might be the most promising ethical alternative to deception-based research methods.
Historical re-enactment has been practiced for millennia. The ancient Romans, Han Chinese, and medieval Europeans all organized events in which participants pretended to be from an earlier age, primarily for entertainment. Within the 20th century it became a widely pursued hobby for adults.
Role-playing is considered an important part of a child's psychological development. The moment a child begins to define "I" and separate themselves from an adult is described as both the initial condition for and the result of role play. Research has also found that role-playing can produce behavioural change, such as smokers who reported negative attitudes toward smoking after acting out the role of a person diagnosed with lung cancer.