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The rules are... there are no rules!!! Talk all you want but until there is one consistent system it's gamesmanship and clubs one-upping each other and it will just continue into perpetuity.
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You're kind of making the point that it is one big game of who can cheat more. The rules are an honor system, which is why they can be broken. Most people have some sense of right and wrong which is why most have their kids play on grade, which although not formally written is fairly intuitive and obvious - you're kid is either in a given grade or they're not; playing up is fine, playing down is cheating. Those parents having their boy play down have lower morals, and they know it's wrong, which is why they don't generally advertise it. Holdbacks are a whole other problem, and technically within the rules, but the practice is questionable, if not downright wrong, which is why EVERY OTHER MAJOR YOUTH SPORT has gone age-based.