Sheik Yusuf Al-Qaradawi, in his well-known book, The Lawful and the Prohibited in Islam: “There are some kinds of three-dimensional figures which are not intended to be accorded respect or to be displayed as an expression of high living. Islam does not close its mind to them, nor does it see any harm in their use.
Children’s playthings such as dolls, in the form of humans, animals, and the like fall into this category. Said the Prophet’s wife `A’ishah (may Allah be pleased with her): I used to play with dolls in the house of the Messenger of Allah (peace and blessings be on him) and my friends would come over to play with me. They would hide when they saw the Messenger of Allah (peace and blessings be upon him) approaching, but he was in fact very happy to see them with me, and so we played together. (Reported by al-Bukhari and Muslim). `A’ishah also reported, “One day the Messenger of Allah (peace and blessings be upon him) asked me, ‘What are these?’ ‘My dolls,’ I replied. ‘What is this in the middle?’ he asked. ‘A horse,’ I replied. ‘And what are these things on it?’ he asked. ‘Wings,’ I said. ‘A horse with wings?’ he asked. ‘Have not you heard that Solomon, the son of David, had horses with wings?’ I said. Thereupon the Messenger of Allah (peace and blessings be upon him) laughed so heartily that I could see his molars. (Reported by Abu Dawud)
The dolls mentioned in the above hadith are the dolls with which children play, as `A’ishah was quite young when she married the Prophet (peace and blessings be upon him). Ash-Shawkani says that these ahadith are sufficient proof of the permissibility of children’s playing with statue-like three-dimensional figures (i.e., dolls of human or animal shape). It is reported that once Imam Malik saw a man buying dolls for his daughter and he disliked it, but Qadi `Iyad says that it is permissible for girls to play with dolls. (Because girls are more likely to play with dolls than boys, only girls have been mentioned here. However, this does not imply any prohibition for boys to do so.)
This permission also applies to figures made of sweets for festive occasions since they are used only as food.”