My 3 year old son, was completely sure he wanted a castle birthday"  when I asked him.  Here's what we did. The invitations were made on my computer.  The background had a castle and "old looking" paper style.  We used Olde English font and the invitation read "Hear Ye Hear Ye Sir Arron is turning 3 years old on . . .  and all knights and princesses from across the land are invited to attend. There will be dragon slaying and princess saving."  . . . We rolled most of the invitations up in a scroll and hand delivered them.         The guests arrived and entered the living room which was decorated with blue and yellow balloons (the colors I chose for the party) We tied the balloons down with Fisher Price Imaginext dragons toys and set them around the room. In the center of the room I constructed a large cardbord castle to color. I also hung a sign above the castle for saying "Color the Castle". I had washable markers in a bin outside the castle.   In the next room the main room with the family room and kitchen I had a small table set up so the children could make foam crowns. I ordered the foam crowns from the oriental trading company - they came with sticker foamies to stick onto the crown  The children also used the stickies to spell their names. For this activity I had my friends daughter dress up like a princess - she was assigned to help the children make their crowns. After they made their crowns they could color the castle play outside in the 'castle"  - we have a large play structure with a blue and yellow canopy where the girls pretended to be princesses and were trapped in the tower by the evil dragon.  We also purchased a 4 foot inflatable dragon from Oriental trading company my husband attached it to the top of the play structure. This added to  the childrens play acting.  The boys pretended to save the princesses while sliding down the slide and swinging on the swings.  Later we passed out inflatable swords had the dragon "fly" off of the castle and the knights attacked him by pummelling him with their infatable swrods - even some of the Dads joined in.  Under the fort castle we filled the sand box with fresh play sand and I bought castle beach molds and the children made sand castles!  We had another dragon slaying of a dragon pinata - we purchased this from Birthday Party Express. We fashioned a sword out of a broom stick and the knights and princesses all lined up to "slay" the dragon.  We filled the dragon with treasure - candy and toys. The children got a bag full. The cake was a castle cake with knights and a dragon on it. We also had a station where the children could play with our Fisher Price Imaginext castle and a station with Fairy Tale puppets for children and parents to act out favorite fairy tales. We ordered pizza and had sodas and juice boxes (I know nothing fancy) but it fed everyone in an easy way so that we could monitor their play better. This party was the best party I have been to!  Here's why I think this :  The activities were set up in stations that children could freely play at based on interest. No one was forced to make a crown or color the castle or lay the dragon.      Station 1 - coloring castle - lay out markers and place a sign over it so parents know the children are to color the castle.  One little girl spent 3/4 of the party decorating this castle.    Station 2 : Make a crown - most all children made a crown with help of the princess or their parents. I also provided velcro and the crowns stayed on exceptionally well.    Station 3:  Slay the dragon - blow up dragon blow up swords - need I say more?    Station 4 Sand castle building - Some children spent 3/4 of the party in the sand box. Station 5: puppets - older children made up puppet shows with princesses and dragons Station 6 :  My own childrens Imaginext Castle toys - many played for a while with these toys.  For favors I made three types  For Boys - Each boy took home an inflatable sword a lollipop with a tag that said " Thank you for coming to Arron's 3rd Birthday Party and had a picture of a castle on the tag and their crown plus a treat bag of treasure.  For Girls - Each girl took home 2 inflatable princess wands a lollipop w/ tag like the boys a crown a necklace and a treat bag of treasure.  For the babies - I found some dragon little people and bathtub squirters for them.      "