The best place in Sydney for children is the Rocks. This historic neighborhood always has a festive buzz to it (and also holds festivals frequently) along with having the Royal Botanic Gardens and Taronga Zoo very nearby. The Rocks is sure to have some great entertainment for children if you are there when a festival is going on. If not, you and your family can stroll down to the Puppet ShopRocks Toy Museum
where amazing arrangements of puppets are on display. There is also the which hosts an interesting array of toys.
Also, you can go to the Taronga Zoo and gaze at the impressive range of animals (and sometimes feed them).
You can also go the Royal Botanic Gardens, which are very pleasing to the eye and have wide open fields where children may be able to run around and play as they choose.
Taking the family to a show at the Sydney Opera House could be another child-friendly option.
However, the most enjoyable for the family will probably be visiting the Lunar Park located in Milsons Point, Sydney. This historical amusement park boasts an over 70 year history and offers 14 fun-filled rides, including four geared at very young children.