I adopt what they do at kindy - I firmly ask the child to move away, and if they won't then we move away. My kids have been followed around playgrounds by random kids who seem to become attracted to them or something. DD2 finds it really upsetting as she is extremely shy. 9 times out of 10 the parents are around and usually intervene so it's resolved.
I would never, ever condone my child hitting back, nor would I ever lay hands on another child unless they were actually on top of one of my kids and I was getting them off.