Funnelling is ensuring that primary attachments can be built with frightened traumatised children. This is more intense than that needed by children who haven't had such huge loss/trauma. Normally, a baby is born, having lived inside the mother for eight months or so, learning her sounds, her rhythms. She is then the primary carer, so familiar. This securely attached child is a completely different child to the adopted child, who has learned that mums are unreliable, just disappear, and the next kind adult to pick them up one morning could be their next mum.
Funnelling involves doing all care, reducing touch from, and in the early days, interaction with, anyone else. It helps build that primary attachment that is taken for granted for secure children. I've also heard it called other names, such as "nesting", "hunker down time". Whatever you call it, it's essential for a frightened child who has lost everything, especially when pre-verbal, so they can learn who their mum/primary carer is.
Children are less of an issue, unless your child was cared for, or abused by, older children before they came to you. Secure children learn gradually, and by smell, which children are familial etc. Adopted children, especially when pre verbal, can't tell whether this child is a stranger, a friend, a new sibling, or a cousin. Keeping an adopted child's world small is a good way to help them learn they are safe, who to attach to, and to calm their anxieties.
Secure children automatically gain "stranger anxiety", which is normal and healthy, about nine months. A baby who is placed for adoption when they are supposed to learn that can have lifelong problems, because adoption asks that they override the natural "stranger anxiety", as they lose everything they've known, for the second or third, or even fourth, time, before they're even walking and talking, and are given to another set of strangers. Funnelling is used to try and rebuild "normal" function. Attachment problems are devastating, and if there is something reasonably simple that can be done, then why wouldn't you? That said, it was one of the hardest times of my life. I'm reaping the benefits now, though, as I don't think we'd be doing so well now, if I hadn't invested that energy. It took all I had at the time.