True about this condition is

This is Giant congenital pigmented naevus (GCPN) or giant hairy naevusIt is a hamaoma of naevo-melanocytes that has a tendency to dermatomal distribution. It has a similar histology to compound naevi, but the naevus cells are distributed variably from the epidermis throughout all layers and into the subdermal fat and muscle. GCPNs are precursors of melanoma. A 3-5% lifetime risk of melanoma is quoted. 1 in 3 childhood malignant melanomas (MM) arise in patients with GCPN.A Mongolian spot, a congenital blue-grey macule found on the sacral skin regresses completely by age 7 years.Ref: Bailey and love, 27e, page: 601