Its kind of become a tradition of mine to make fairy houses around our yard. And while age 2 is still a little young for 100% focus on a project like this (she'd rather dig in the dirt), Lucy and I recently had fun spending a few days creating a potted fairy garden together.
We used a wood bird house (you can find them for .99 at craft stores). We covered it with moss and twigs that we collected from the yard.
I even created a door from driftwood that I wood burned.
We decided to create the garden in a big pot so that we can also grow small plants so we filled a pot with dirt and then got to work creating our garden.
We created a path from rocks that we collected in the yard and fence from twigs. Our local garden nursery sells tiny things for fairy gardens and we couldn't resist picking out a few embellishments for ours (a tiny chandelier, a chair and some mushrooms).
And while I may have had more fun working on our garden, it was the perfect kids craft to kick off spring!