The worst thing you can do is to send your child along with their aunty’s old guitar which is far too big for them (and has been warping in the attic for 20 years). No matter how sweet they look when they are holding it, it is still TOO BIG!
As a rough guide, most children in Years 3 -6 will get on best with a three-quarter size. From Year 7 upwards, they will move on to full size. Sometimes we start with a half-size guitar – but if a child is too small for a three-quarter size, then I will often advise doing a year or two of ukulele first, and switching to guitar later. Other teachers may disagree, but I find that most half-size guitars are simply too small to have much tone, and the strings can be so close together that it is difficult to pluck and fret the strings accurately.