Here's how it works:
1. The "Reverse Psychology" Trick: Peter pretends to be completely indifferent to what Fudge is doing, even if it's something he doesn't want him to do. He acts as if Fudge's actions are completely unimportant. For example, when Fudge starts playing with a toy truck Peter wants, Peter says, "Go ahead, play with the truck. It's yours. I don't care."
2. The "Forbidden Fruit" Effect: This makes the toy even more desirable to Fudge, because it's now forbidden. Fudge, wanting to do what he's told not to do, will become more insistent on playing with the truck.
3. The "Unintentional Control": By pretending not to care, Peter actually ends up controlling the situation. Fudge, in his desire to defy Peter's apparent disinterest, ends up doing what Peter wanted in the first place!
So, while it's not a particularly ethical or effective method in the long run, it's how Peter manipulates Fudge in this chapter.