They went on to tell her that some nice people in the town were arranging for her to get into a children's home.
"I already have a place in a children's home," said Pippi.
"What?" asked one of the policemen. "Has it been arranged already then? What children's home?"
"This one," said Pippi haughtily. "I am a child and this is my home. Therefore it is a children's home, and I have room enough here, plenty of room." (3.8-11)
This is particularly funny because Pippi has a great point. Her house is a children's (or at least a child's) home in the most literal sense, whereas the children's home where the police and townspeople want to put her is most likely run by adults. And of course, as Pippi points out, there simply wouldn't be enough room for her (and her monkey and her horse and her imagination) in a home like that.