Automatic toxic language detection is important for creating safe, inclusive online spaces. However, it is a highly subjective task, with perceptions of toxic language shaped by community norms and lived experience. Existing toxicity detection models are typically trained on annotations that collapse diverse annotator perspectives into a single ground truth, erasing important context-specific notions of toxicity such as reclaimed language. To address this, we introduce MODELCITIZENS, a dataset of 6.8K social media posts and 40K toxicity annotations across diverse identity groups. To reflect the impact of conversational context on toxicity, typical of social media posts, we augment MODELCITIZENS posts with LLM-generated conversational scenarios. State-of-the-art toxicity detection tools (e.g. OpenAI Moderation API, GPT-o4-mini) underperform on MODELCITIZENS with further degradation on context-augmented posts. Finally, we release LLAMACITIZEN-8B and GEMMACITIZEN-12B, LLaMA and Gemma-based models finetuned on our dataset, which outperform GPT-o4-mini by 5.5% on in-distribution evaluations. Our findings highlight the importance of community-informed annotation and modeling for inclusive content moderation. We will release all code, data and models upon publication.

In this paper, we study whether language models are affected by learned gender stereotypes during the comprehension of stories. Specifically, we investigate how models respond to gender stereotype perturbations through counterfactual data augmentation. Focusing on Question Answering (QA) tasks in fairytales, we modify the FairytaleQA dataset by swapping gendered character information and introducing counterfactual gender stereotypes during training. This allows us to assess model robustness and examine whether learned biases influence story comprehension. Our results show that models exhibit slight performance drops when faced with gender perturbations in the test set, indicating sensitivity to learned stereotypes. However, when fine-tuned on counterfactual training data, models become more robust to anti-stereotypical narratives. Additionally, we conduct a case study demonstrating how incorporating counterfactual anti-stereotype examples can improve inclusivity in downstream applications.