So there's a crude sense in which, if you have to ask, you aren't competitive anyway; and in that case, why not just do each competition for fun whenever you qualify and not worry about it?
We've always wound up with dd14 competing against much older kids and I have to admit to mixed feelings. For instance, she is competitive for things like National Merit, but if she misses it by a hair it will likely be b/c she will be a very young 15 y/o high school junior when she takes the PSAT rather than a 16 or 17 y/o junior. Likewise, when she did talent search years ago. She wound up making the awards ceremonies, but wasn't a top scorer. Again, though, she was being compared to kids who were much older than she b/c they looked at grade level not age.
On one hand, I do feel that it is fair to look at grade level b/c she's had about as much education as older kids. On the other hand, I know that there are people doing exactly what the OP mentions: have kids who are doing multiple years of subject acceleration in math and other subjects but who are still called 8th graders or 6th graders or whatever on paper, so they've had much more education than the other kids of the same grade to whom they're being compared.
What I try to remind myself is that getting an appropriate education and learning work ethic is more important that winning contests. It is harder when you are dealing with things like National Merit, though, b/c there is potentially money involved for college and that is something we really need.
