Doing my discs and pads. Done front. Doing back, got the rewind tool on the piston and on the disc of the tool are 2 pegs, do these sit in the recesses on the piston? Trouble is as I turn the piston starts taking the gaiter with it. Is the piston supposed to turn as it goes in? What's going on?

Yep, the two pegs should fit snugly in the recesses on the piston. The tool allows you to push & turn the piston back into the caliper (as the piston is hollow and sits on a big threaded bolt basically).. hence the name 'Caliper wind back tool' as you're winding the piston back.

But should the piston turn? Excuse my dumbness but I don't like the way it's pulling the gaiter with it, don't want to damage it.

Yes, the piston should turn.. you're basically 'screwing' it back into the caliper.

Sorted it, eventually it turned without knotting up the gaiter. Other side it scrunched up the gaiter a bit but didn't look damaged. Quick road test all seems fine, no nasty noises or vibrations and starting to sharpen up nicely. Cheers.