(S, 5 years old) wanted to have a turn being the GM, so we gave her a try. She decided she wanted it to be Adventure Time themed, so (C) picked Finn, wife picked Jake, and I took Princess Bubble Gum. Her setup was that there were more bushes around the tree house than usual and soon Lumpy Space Princess came to tell us she saw a giant tree monster.
She made up the mechanics on the fly, using d6 totals for all our actions and the difference between rolls for damage dealt. It was an intense fight and if I wasn’t dual wielding a flame thrower and a lava gun I may never have outdamaged his regen. Even so, without Ice King’s arrival, we probably wouldn’t have won.
She was eager to run us into the next adventure, a fire monster in the flame kingdom, but we had to call it a day. So my advice if your children want to GM: let them do it and don’t worry about mechanics, just let them make it up as they go.