This is fairly typical behavior at this age and motivated by curiosity (I'll show you mine if you show me yours or does yours look like mine, or feel the same etc). Granted the age difference is more than 2 years but based on the circumstances, it doesn't sound abusive. Usually the idea comes up suddenly (very little planning) and almost at the same time.
There aren't too many kids that haven't played 'doctor' at some point. Both participants, however, need to feel free to say 'no' without negative impact on the relationship / friendship. Generally, once curiosity is satisfied, the kids will get bored and want to move on to something else.
They'll come to understand that most boys look the same and most girls look the same. Now let's go do something else. It's also important to not be judgmental or accusing.
The kids need to know they aren't in trouble so they'll feel safe in talking to you and be honest in what's happening. It is abusive if it continues after being told to keep their pants up, or if there is any use of force, fear, threat, intimidation, coercion, or bribery etc. Abuse comes from a imbalance of power or control. It's no big deal now but let's not make it a habit.
Good luck Btw - it may be time for the nephew (age 8) to have the TALK so that he can learn to respect those aspects of people's bodies.
Instantly I can see that there is a paedophile involved in this. Perhaps the 8 yr old has been touched inappropriately by an adult or another child. I would suggest investigating this quite seriously as there is no 8 yr old in the universe who would want to touch another boys privates without something in his head making him do this.
I think you should chat to the 8 yr old, and ask if anyone has been doing this kind of thing to him, and if it's a child you should continue from there... I think there has been a domino effect of molested children here, one child gets molested then goes on to molest another child so on so forth. So there is obviously a line of children who have been molested and I think you should follow this line until you get to the person who started it. There is also a possibility that this 8 yr old is bi-curious, which means they are curious about other boys bodies, maybe you should take the 5 yr old and the 8 yr old to a children's psychiatrist and get their thoughts cleaned.
I hope this problem gets solved.
I cant really gove you an answer,but what I can give you is a way to a solution, that is you have to find the anglde that you relate to or peaks your interest. A good paper is one that people get drawn into because it reaches them ln some way.As for me WW11 to me, I think of the holocaust and the effect it had on the survivors, their families and those who stood by and did nothing until it was too late.