Get your kids moving around outside to warm up and loosen their muscles. Find some upbeat music and play it loud enough so the children can hear it over other noises. Lead them in basic dance moves. "Head, Shoulders, Knees and Toes" is a song most preschoolers will know and already feel comfortable doing. Start by demonstrating how to touch your head, shoulders, knees and toes, and then supervise the children. Help any who are having problems.
Play music that describes the weather the children are playing in. Because preschool sports festivals usually will be held outside, you will likely have good weather. You can choose sunny music, such as "Here Comes The Sun," by The Beatles. Let the children make up their own dances. If the weather is cold, hand out scarves and let the children wave them around to the beat. Not only will this get them moving, it will help develop their creativity.
Play music your children already know. Music that uses hand and body motions, such as "The Itsy Bitsy Spider" or "I'm a Little Teapot," works well. Have children act out the motions indicated by the lyrics. You can teach them the moves, or have them interpret their own movements based on the words.
Tell the children to join hands, make a circle and dance around for a more group-oriented activity. To make this more challenging, have the music stop at various points and tell the children to drop each others' hands and sit down. If you don't sit down fast enough, you're "out." Keep going until you have just one winner.