You'll need various size terra-cotta pots to begin with. Different crafts use different additional materials, but a newspaper or other cover keeps your work surface neat. Acrylic paint, which comes in a range of colors, works well for semi-permanent crafts like this one. If you wish to really protect the design, you'll have to spray on a clear sealer when the paint is dry. This will also make the pot less porous, which might make it easier to keep plants watered in hot weather.
Young children can brush paint on random patterns.
If you'd like, use one color at a time and let them dry in between. Think of scenes from gardens, portraits of the flowers that will go in the pot, handprints of your child over another color, or arty squiggles. Really, anything works pretty well, especially if you group pleasing colors together. Paint a trio of pots for kitchen herbs. Paint bright, Southwestern-style designs and grow peppers.