No, it’s not great works of literature written by children.
In general, when people talk about children’s books, they are talking about works aimed at kids under the developmental age of approximately 12 years old. They tend to be short chapter or picture books with limited text to each page, a restricted vocabulary, and short, to-the-point ideas and story lines.
There’s no bright line between young adult and children’s literature. Much depends on the developmental stage of the child. Like any other sort of genre distinction, it’s as much about marketing as it is about the actual audience for the books. Kid lit can further be grouped by genre or by the target age range of the reader.