Any punishment should be a natural consequence where possible. So fighting over a toy, the toy is removed. Removing from the situation for a time out, or time in, explaining that its not acceotabke behaviour is good too.

Removing something they value temporarily also works. A favorite teddy, a toy. They dont need to be actively engaged with it at the time. It just goes to the time out zone.

We have a naughty seat. Its the same as the snack seat. So when a time out is needed, its always the same spot. They can inky leave when their time out has passed and they recite a challenge. This is age appropriate. For a 3.5 year old, that could be counting to 10. For a 4 year old, counting backwards. A five year old, counting to 20 etc. Its more for repetition and redirection than punishment. We ask them to verbalize that they won't do it again and they need to show they are sorry. That means offering a hug or similar rather than just saying sorry.