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Religion, at its most basic, is moral education. Divinity is either acknwledged as present, acknowledged as an active force in one's moral life, or not a factor in moral decisions at all. That is up to the parents. Divinity, or the fear of a particular divine entity, is indeed a powerful motivator at act rightly. But fear does not make for good judgment.
Personally, I would prefer that children know that there is some entity, force, or what-have-you that exists beyond their normal frame of reference, and that is the benevolent creator of all existence. But then again, those are MY beliefs, and may not be yours ;-)
Parenting Beyond Belief is a great program for helping your child/ren develop religio-cultural literacy without indoctrinating them. I strongly encourage parents to make sure their children have a basic understanding of the world's major monotheistic and polytheistic religions simply because they are proverbs, oft used metaphors, and have a direct impact on world politics and social dynamics.
Raleigh Pagan Homeschoolers and Families is a Triangle area online group that I founded in 2005 to serve the needs of parents trying to instill Pagan values of blessedness, connectedness and interdependence into their children's hearts.
Pagan Churches that Welcome Children
Unitarian Universalist Fellowship of Raleigh (Sunday services and many more activities)
"Children are welcome. Childcare for infants and toddlers is offered at both Sunday morning services. Older children may attend religious education classes during the 11:00 a.m. traditional service, and we also feature a sound-proof wiggle room with piped-in sound and visual access to the sanctuary.
Children age 3 and older participate in the first 10 minutes [of the 65 minute service] before leaving for religious education classes. Younger children may attend childcare or remain with their parents in the service (and our wiggle room accommodates restless youngsters).
The UUFR Youth Religious Education (YRE) community a warm, supportive and caring program, where children can feel comfortable, find acceptance and fellowship, and have fun. "
Church of the Earth in Raleigh (Sabbats)
" Pets and children are welcome if well controlled."
Central NC Pagan Pride Day (Annual event at the State Fairgrounds in Raleigh)
"As always, we will provide some special activities just for kids, keeping an eye on them for a little while so you can attend a workshop or just take a moment to yourself.
IMPORTANT: Kids can only be left for an hour at a time and only by a parent and you must not leave the festival grounds while they are in our care. This is not a day care service."
Children in Ritual
Children are very impressionable and do not have the wealth of experience and knwledge that adults use to understand complex issues and feelings. Therefore, it is not appropriate for a young child to see sexually explicit acts or rituals, to see or perform violent actions, to reenact death or abandonment, or to formally perform magic.
The young developing brain is in a state of what psychologists call, ironically enough, "magical thinking." This frame of mind makes it difficult for them to separate ritual from reality, and often can imprint incorrect ideas on them that may lead to poor self-esteem, narcissism, or other social and psychological impairments.
Here is a document that compares various theories of childhood development. I created this document for the 2006 Pagan Pride Day workshop on homeschooling. You can see the ages at which various benchmarkings are typically acheived, physically, socially and morally.
Indigo Children
Interesting Tidbits
This is an essay I found a few years ago about how the story of "Harold and the Purple Crayon" parallels a shamanic journey. This is an essay written by an adult, for adults. But it might help you read and discuss the story with your child/ren much more effectively.
