Just back from one, so..
Think layers first of all. So you can layer up if its cold and wet, and strip down if its warm. So if it were me I'd take a few pairs of jeans, or whatever trousers you live in normally and then on top wear: nice vest, tshirt, cardigan or jumper, waterproof mac. I'd also wear trainers and take wellies in case of mud. Don't wear anything that you'd mind getting wrecked. Ignore what Kate Moss etc wear when they go to festivals, they have backstage passes! The rest of us need to aim for comfy and practical.
Night time I'd just stip down to the vest / tshirt combo and change into jogging bottoms. I'm assuming you're all in sleeping bags. If you've got a thin futon type mattress you can take, that will make a difference, if not get a good ground sheet type thing, the cold really seeps up from the ground into your bones..
For kids, I'd do roughly as above, but take extra changes in case of mud.
Remember: sun cream, sun hats, sunglasses, wellies, waterproofs, toilet roll, wet wipes, picnic blanket, plenty of water and snacks. If you can't not wear make up, take a mirror and cleanser wipes.
Do assume you won't get near a shower while you're there and be prepared to make the best of it with wipes etc. Do absolutely cover yourself and the kids in suncream if its even a bit sunny. Lots of people with burned necks at the weekend and it was pretty cloudy.
Which festival is it, do you mind me asking?