It can be pretty damaging for a child to be catagorised too early. I speak from experience somewhat... (and please don't take this as a bragging post, it really isn't intended to be).
As a child I was extremely bright - a lot more so (relatively speaking) than I am now. An early developer if you like. Anyway, I had my routine assessment at age 3, and the woman who came to assess me told my parents that I was "the most incredible 3 year old she had ever seen". She told them that I was "one in a million". While I'm sure that this was pleasing for my parents to hear, it created a level of expectation that was impossible for me to keep up with.
For example, I was always *expected* to be the best at everything I did. If I was, then that was just to be expected. If not, then I must have been doing something wrong. It was impossible for me to win any praise from my parents (or anyone else in authority), because I was only following in the wake of my 'gift'. When I got straight As at GCSE and A-level it was "only to be expected". When I got into Cambridge to study maths, there was some concern and disappointment because I didn't get the highest possible grades in the STEP entrance exam. This kind of attitude brewed inside me feelings of resentment towards others, who were allowed to feel proud of their achievements. I was especially resentful towards my brother who was of average intelligence, recieved all kinds of incentives to do well at school, and was always praised when he did something well.
Now I don't blame my parents for any of this, they were only trying to get me to live up to my full potential, but it has certainly left me with residual emotional problems. I have no real motivation to do anything, I feel no pride in my work, I feel extremely uncomfortable when anyone says anything positive about me, and I still have massive envy for people that can be proud of their achievements.
Anyway, the point of this long-winded post is that parents should be very careful about labelling their children too early, in any way shape or form. A child should at least be old enough to understand the meaning of their 'label' before it is affixed to them. I believe this holds true with alsorts of assessment, including primary school exams etc. As for the specifics of this case, having the child take a MENSA exam (which IIRC only means that his IQ is over 150), it sounds like the parents are living through their child. I hope that they don't push him too far, as a lot of children burn-out as a result of such pressure.