Student or Learner
i do not understand the meaning of the sentence in bold.
[ From ten to twelve years old, children's mental processes are still sort of tied to direct experience. But on a social level, children can now understand actions as an outsider might see them. this permits children to understand the expectations people have of them in a variety of situation.]
(and, what is them in that sentence in bold?)
"Them" refers to "actions".
It means "children can now think of their own actions in the same way that other people think of those actions".
Thus if I am a child of that age, and am about to e.g. break someone's window with a cricket ball, I can imagine how other people will regard that action.
Not a professional ESL teacher.