From day one of coaching I've tried to incorporate my parents into the practice sessions, drills and goals of the team. All of my baseball practices have stations with a parent (or two) manning it as the kids rotate through.
Stations have specific objectives towards using your glove, your bat or your feet. Getting parents involved minimizes lines (long lines are the mark of a poorly run practice) and maximizes play. We try many things in our stations and we hopefully create new pathways in the brain (i.e new skills).
I welcome participation and input from my parents at practice but I ask one thing of them in return. When we start the game - they hang up their coaching whistle.
I believe that there are two modes in sports. Practice mode and play mode. In practice mode you create new skills by getting kids on the edge of their ability. If a t-baller can catch an eight foot popup - throw them 12 foot popups. If he doesn't drop a few then you're not stretching him and creating greater range. If a skater can lean 20 degrees on a turn, set the cones to require a 30 degree lean. One of the values of races (which I love) is that it pushes athletes to do a skill at the edge of their control level. As they do, that edge expands.
My point to this (and I do have one), is that in Play Mode, you turn all of that practice theory off and just play. You don't learn to catch or hit during a game. I'll say that again for the parents - you don't learn to catch or hit during the game. So don't coach.
I ask my parents to tell me if they see something that they would like me to adjust. Of course, I'll line up a kids feet or switch their hands if they're cross-handed but even I try to minimize game time coaching. If we didn't get it done in practice, there's little we can do under the bright lights of game. I certainly don't want instructions and adjustment coming from the stands.
My favorite parent 'coaching' squall was "Watch the ball, Jack!". Seriously? You're interrupting his focus and play with that?
It took me a couple years of coaching to have this epiphany, but I now require my parents to not coach during games. It siphons joy from the kids. It conveys disapproval of their performance. And by the way - it doesn't work.
Help your kids advance their skills through repetition of proper technique in practice. In the games, they'll do what their muscle memory tells them and allows them to do.
Once the umpire says "Play Ball", the only thing a parent should yell is 'Atta boy, Jack!'.