Come up with the concept for the skit. You can use a fairy tale concept or you can add more of an educational element, such as recreating an event in history. Let the kids help decide what the skit will be about.
Write the skit. The skit needs to have dialogue for each character and will probably also need a narrator to explain what's going on. Again, if the kids are old enough, let them help out. Keep the skit shorter to make sure the kids retain interest and can learn their lines.
Cast the actors for the skit. Give each kid a part and let one of them be the narrator for the skit. The narrator can read, rather than learn the lines.
Print out enough scripts for each kid to have one. Highlight each part separately on the scripts to make learning the lines easier for each kid.
Dress the kids up in costumes to represent the part they're playing. The costumes can be simple, such as a hat and prop. Let the kids help choose their props.
Video tape the skit. After the kids put in so much effort to put on the skit, you'll want to have a record of it to enjoy for years to come.