1. Every child is an artist
I don't possess any special training in teaching or child psychology, but I find that a genuine concern for kids and a bit of reading helps. Pablo Picasso once said that "Every child is an artist. The problem is how to remain an artist when we grow up". Take for example children under the age of five. They are comfortable with painting a person with orange arms and a blue face, or a dog that's the proportionate size of a cow. They don't worry if the grass is yellow and the sky is red. They are expressive and uninhibited.
Experts say that as children grow older, they no longer draw or paint just for fun. By the age of 8 to 10, they begin to concern themselves with achieving realism. They can became increasingly frustrated with art because their aspirations exceed their abilities. How then, as parents and teachers, do we encourage children to be creative and to continue enjoying art? Experts advise that it is important for us, as adults, to firstly understand the different developmental stages in art that children go through, from scribbling, to creating symbols, to imitating life.
~ Art begins with a scribble ~

~ At age five to six, children often introduce a baseline with which to organize their space ~
2. See things through their eyes
You may have noticed that most modern abstract paintings look like nothing more than a 5 year old's masterpiece (to the untrained eye anyway). Experts think that grown ups often fail to appreciate that children see and feel things in a very different way. Drawing, painting and sculpting can be a very personal process for them, which relates again to their developmental stage .
It is also unfair to assume that when a child joins an art class, he or she will later be able to win art competitions. It isn't really fair to impose this on our kids, since we wouldn't expect the same achievement of ourselves. In short, inflexibility takes all the fun out of art.
Maya Angelou once remarked that: "We are all creative, but by the time we are three of four years old, someone has knocked the creativity out of us. Some people shut up the kids who start to tell stories. Kids dance in their cribs, but someone will insist they sit still. By the time the creative people are ten or twelve, they want to be like everyone else."
If there's one important lesson that I took away from art school, it's that once in a while, you need to let go. In other words, leave kids to their own devices. As adults, we are preconditioned to judge art as either 'good' or 'bad'. Unless you're a professional art critic, I think it's probably unfair to look at art (especially kids art) in this way.
One must always think positive - point out the imaginative use of colour, ask them about the action in the drawing, show genuine interest in the way a child prefers to draw or paint. When you think about it, isn't the creative process much, much more important than the end product? Our kids may never win prizes at those art competitions, but it's rewarding enough to know that we've given them the space and opportunity to express themselves freely. Something we may have been deprived of in our childhood.

~ Each child develops his/her own set of symbols, which are based on their understanding of what is being drawn rather than on observation ~
3. Respond positively to children's art
One of the most important things to deal with, when it comes to kids and art, is the response that parents, teachers and family members give to children's creations. This is especially crucial when they reach that 'tender' stage of becoming more self-conscious. Most grown ups will respond to a child's artwork by exclaiming in a rather 'fake' voice: "Oh, that's nice...". On occasion, there is the slightly more condescending remark like: "Is that supposed to be a cat?".
Kids are highly intuitive, picking up on the slightest hint of negativity in your voice, body movement and even the look your face. Basically, the message they get when they hear generic things like this is "you're not very good at this" or "I'm not very interested in what you have to show me". After a while, children may feel defeated, spending only a few minutes on the task at hand and giving up half-way out of frustration.
If a child we know does this, we will have to reevaluate our approach. My personal tip is - never talk down to kids. The goal is always to build the child's confidence and reinforce their individual way of thinking and doing things. I'm a big fan of children's literature and as they say in the business "You must write for children, as you write for adults, only better". People who write stories for children know that kids are unique, intelligent and sensitive beings. Always keep this in mind.
Conclusion
While it's important for us to appreciate the sensitive balance involved with kids and art, we shouldn't worry too much. Art is meant to be fun. As an adult, we should keep in mind that the emphasis of any art activity with children is the process and not the end result. As there is no sure-fire 'instruction manual' on how to deal with frustrating moments, we must take the time and effort to personally attend to our children's creative development in any way we can, which means we'll have to be creative ourselves!
~ Most young children are not concerned with producing a realistic picture ~