I run the family area of a festival. We went as paying guests during its first year, my husband as I were asked to steward the following year (with the kids in tow aged 7 and 3 then). This will be our 5th year and we've been running the kids area since our 3rd year.
My tips,
Food at festivals can be expensive, and food options can be difficult if our kids are fussy like mine. We have a great cool box and we take lots of snack type things such as brioche rolls, biscuits, sausage rolls, baby bels and we all eat those things for lunch (stewarding means we can also have unlimited toast and soup for £2 a day) At tea time we treat ourselves to the amazing festival food and the kids get to choose whatever they like. We don't stress about it and healthy eating goes out of the window. Last year there was the BEST chippy van I have EVER had (It was a converted Fire engine and there were batter bits in with the chips) My DS had those every night and DD had either those, or crepes. (Or both as the chips were that good we went back for 2nds sometimes)
Most food places are accommodating so when my son was younger and REALLY fussy the pasta place was happy to just give us a bowl of pasta with no sauce.
Take drinks bottles and juice if needed and just keep filling them up rather than buying kids drinks.
I've been looking at parents with wagons with envy for the past 4 years. My kids are too big for them, but I'm fed up of feeling like a pit pony, so this year I've invested in one from Germany, it was cheaper than ones in the UK and has big chunky wheels so won't get stuck if there's mud and I can take it to the beach too.
Kids love glow sticks, bulk buy them from £ shops before the festival. I end up giving them out to people.
Check what facilities festivals have for kids. In our kids area we have a children's toilet, you're only allowed in it if accompanying someone under approx 4 foot tall, or if you're carrying cleaning materials. We clean it at least every half hour. We also have a baby change area, with everything you'd need, a discrete feeding area if you want it, unlimited fruit juice for kids, biscuits, suncream, and loads of different free craft activities.
Take a couple of spare changes of clothes for kids (Give up on the potty training if that's what stage their at, we got through all the changes of clothes and put him back in nappies)
The all in one waterproofs are great.
Dress your child in something odd so that you can describe them easily if they get lost.
If you do lose them try not to panic, find a steward, they'll have had training in what to do if a child is reported missing. We have someone who specifically co-ordinates this, as well as any other welfare issues, but all stewards are trained in the process.
Let your kids know that if they lose you to also find a steward.
Also if you've lost our child, have told a steward, and then you find them, please let the stewards know your child is safe so they can stand down and do things like start letting people in and out of the festival again :D (From my experience checking the child has been found and is safe takes longer than actually finding the child because parents are so relieved they just walk off and forget to let the stewards know.)
Take a picnic blanket and blankets, (that's why I need the wagon) my kids have slept through as many acts as they've seen. If they're tired we wrap them up warm, and put them somewhere they shouldn't get trod on.
Don't expect routine, it's normally my DD who's 10 who flakes out hours before DS6 ever does, he's always full of beans astounding everyone with his groovy dance moves. :D
And have fun! We're lucky enough that school know a festival is a great learning experience, so we're allowed to take them out of school for the Friday & Monday each year.