I agree that a parent might show a child that word, but for what reason? Possibly when children are caught playing doctor? Did he hear it from one of his friends, and ask about it?
How many children that age would even know about the word "incest"?
They WERE caught "playing doctor" by the housekeeper. And we don't know how many times he may have been caught "playing" with his sister by his parents or other people. Someone may have said "you can't so that- it's INCEST". Or maybe his parents simply told him that word and its meaning. He might not have been familiar with that word as part of his normal vocabulary, but there is no reason to assume his parents would not have explained it to him.