How do you teach this?

Question of the day: How do you teach kids what "bad" words are. Whether you have words that are not acceptable in your home like "fart" or "darn", or you are wanting your children to avoid words that are deemed "profanity" in your society...how do you teach it? Do you sit them down and read a list of words and say, "I had better not hear you say this words--ever?" When a word is used while visiting Uncle Joe, do you stop and say, "Even though Uncle Joe said this word, we don't use this word in our home"?

This week, my 5-year old had to change her card because someone said she said a bad word in the cafeteria. She had no idea what she had said. We do not use profanity in our home. (Although you will hear my husband and 3 year old calling each other "fartknockers".) So she wouldn't have heard it there. Maybe she repeated something someone else said? I don't know.

But how to I "introduce" words I DON'T want her to say?