There is an old legend about the gray woman of SimCity. It is said that one day while the Gray Woman was baking a turkey, she got a phone call from a long lost cousin and accidentally forgot the turkey was in the oven. This caused her house to catch on fire, and tragically, the turkey was burned. Also, the woman died. But it is said that she watches over all babies and toddlers from beyond the grave. And that is why they cannot be harmed by fire.
The Gray Woman of SimCity is a statue introduced in The Sims 2: Nightlife. It can be purchased in buy mode for §6,000. It is a statue of a woman who died in the past in a house fire. According to the object description, the Gray Lady watches over all young children and protects them from fire. This offers an in-game explanation as to why babies and toddlers won't die of fire, although the likely reason is that game designers found that young kids burning to death would be too cruel or frightening.