First off, let's get a better definition of Transgender.
"Transgender and gender nonconforming1 (TGNC) people are those who have a gender identity that is not fully
aligned with their sex assigned at birth." - American Psychological Association
Guidelines for Psychological Practice With Transgender and Gender Nonconforming PeopleWe must also define the term "cisgender"; "Distinct from TGNC, the term "cisgender" is used to refer to people whose sex assigned at birth is aligned with their gender identity (E. R. Green, 2006; Serano, 2006)" (Links are found in the noted PDF above.
In the fictional case of "Lily" we must account for a few things:
1) The person is a child
2) The person does not choose their assigned gender at birth
3) The person does not designate their assigned gender upon a birth certificate at the time of birth
4) The person was born with the genitalia classically assigned to, and thus designating, one of the male gender or sex (depending on the wording of the birth certificate)
5) Lily's parents are
>-bleeped-<s
The fact that "Lily" is happy with the way things are is key here. She is still not CIS because when you are young, you have no concept of gender, let alone what is "normal", as demonstrated by her surprise upon seeing a naked person that did not match up with her genetic makeup. However, the gender assigned is "male" as noted in your story, and as noted by the biological makeup of the person. The fact that they grew up as a "happy little girl" says that her "gender identity does not align with her assigned gender" thus Lily is transgender, even if she does not know it.
Now, her parents take it upon themselves to do LIFE ALTERING surgery on a "HAPPY LITTLE GIRL". She was still happy, so now she knows and she's still happy! It's not up to mom and dad to take little Lily and remove her options in life before she even understands that she has options!
I know teenagers who thought they were transgender for YEARS! They then opted to stay their assigned gender. These people are usually under the umbrella of "questioning" which is a wonderful thing! Exploring ones gender, ones sexuality is a part of being human! If Lily is denied this, she will not get to find out what she wants or what she is.
It's quite possible that Lily has been raised to be female, or at least to be a pretty feminine person as there are those whose parents raise kids to be masculine or men. I of course am referring to stereotypes and not to reality. I know that I've never been accused of being manly (despite my parents best efforts) yet I know people that are the spitting image of their parents and that's because that's what their parents wanted. Girls that fight, drink beer and can fix your truck and guys who can cook, sew and decorate... stereotypes suck.
Check out
https://margaretmuirauthor.blogspot.com/2014/09/its-fact-all-boys-were-once-called.html if you want a fun bit of history when Girl was what you called a boy and Gay was what you called a girl. Fun!
Back to Lily.
Lily, if left alone, could easily grow up to be a cisgender guy. They could grow up to be straight, gay, bi and anything in between or left/right/above/below or slightly to the side like. They could indeed be transgender but opt not to transition, or maybe just start HRT. Or maybe go for the whole package deal!
Heck, Lily could have been someone's dad and still did all of the above!
The whole point is that Mom and Dad stole all of this from them. And the fact that they named the baby Lily says that they had this all planned from the start. When the doctor asks the baby's name, they don't expect a kid to be named Marcus if there's no penis or Jennifer if there is. And please, no Playstation 2... yeah, someone changed their name to Playstation 2... they must feel silly now with the PS5 out.
In short, let Lily get old enough to decide for themselves with the mental capacity to do so. Then if anything is to be done, that decision is between Lily, the therapist and doctors along with the parents. The government shouldn't be involved, but that's for another day.
Unfortunately, this was Lily's fate. Lily may end up reversed. The mind of a man and the body of a woman, infertile and having to transition... again. It's my hope that our fictional child grows up to be an author writing a tell all book and then sues the crap out of mom and dad and whatever doctors decided that chopping up a kid who thinks My Little Pony is real, is a good idea.
