When DD was still in nursery, which she was from 4 months, we used to make a spiced Christmas biscuits recipe every year. Year 1, she mixed the eggs with a fork and had fun rolling and cutting some dough for DH and I to eat, and I did the rest (she was 11.75 months). By the time she was almost 4, she was doing most of it herself except the beating sugar and butter together.
What I found was that using small cutters meant lovely small biscuits that little hands could handle easily, and a few larger ones were nice for adults. We had a set of cutters in various shapes (mushroom, star, elephant, car, etc) that were great for small, and I had a gingerbread man, holly leaf and star shape for larger ones.
DD's nursery used to have a show of sorts a couple of days before breakup day, singing Christmas carols and Rudolph, and allowing parents to come in a bit early and enjoy it. So we used to send in the cookies for that, as there were always a few snacks on offer (a few other parents sent in things too, brownies and cookies sort of thing).
We used to give the minders in her room (no key worker but only a couple per room) a card each with either a box of chocs of a nice candle each as well on the last day. DD would make the card at home (hand prints, scribbly scrawls, splashy paint....) and that was always welcomed (to our faces at least) as it was her work.