As an alternate to woodworking construction projects, for little children you can pull out a bucket of legos, wooden blocks, K’nex, or any other type of building toy. You can teach them about how to keep balance so their projects stay up longer, about how to create a sturdy foundation, and some fundamentals to building.
A fun project with wooden blocks is to set up a goofy golf track in your living room. Simply use the blocks as a border for the area that you want to stay within and use any other blocks or other toys to create obstacles, paths, etc. See Mini Golf for more ideas.
Set up train tracks with the kids and for extra fun, you can even create a whole village including houses, stores, trees, people, etc.