Assistant police commissioner Leaupepe Fatu Pula said the 8-year-old had spoken to officers and described the moment before the gun went off.
"One boy grabbed the gun, while the other [James] was saying, 'no, that's my gun'," Mr Pula said.
"The boy that is now deceased was holding on to the barrel and they were playing and laughing - and then the gun went off.
"But he is too young to be charged, according to the Crimes and Ordinance Act that says no one can be charged under the age of 10."
Mr Leausa, who is still under police investigation, told local media: "When I left to get a stick to carry our coconuts home, I was shocked when I heard a gunshot and remembered that I'd left the loaded gun under the tree."
James had close links to New Zealand. His father, Peter May, and a number of relatives live in Te Puke and in the wider Tauranga area.
A family member from Te Puke, who spoke to the Herald, said James had lived in New Zealand for a long time and had only been in Samoa for about a year.
James' father flew to the islands immediately after hearing the news and will be there for his young son's funeral service this week.
It is understood James was not a Kiwi citizen and neither is his mother, Mui May. However, the New Zealand High Commission in Apia is assisting the family as Mr May is a Kiwi.
Police said the 8-year-old boy was no longer in police custody, but had not been sent back to his parents and was instead with members of his extended family.
Mr Pula said the incident had once again highlighted the issue of unlicensed guns in the island nation.
"The police have a tight control over guns. Many of these accidents that happen are from unlicensed guns," he said.
Meanwhile, tributes from friends and family have poured in, with many writing about the accident on social networking sites.
James' mother paid a heartfelt tribute to her son, writing on her Facebook page: "R.I.P my lovely [and] only son James Seuga May. Mommy & daddy miss u so much son ..."