In his book, The Uses of Enchantment, Bruno Bettelheim analyses fairy tales in terms of Freudian psychoanalysis and he defends that fairy tales help children solve existential problems such separation anxiety, oedipal conflict, and sibling rivalries. Children are not yet prepared to deal with the existencial issues' meanings simply because they still lack experience to comprehend life's events themselves. It is different to approach a child with life meanings than an adult for their lack of maturity to begin with - but this doesn't mean that they don't experience the same feelings and emotions as adults -, therefore the approaching must be done differently. Since the child's mind is animist and more freely believing in their own imagination, Fairy Tales take a bigger and deeper scope in their psychic functioning to deal with than an adult's. Children will also identify with the characters and live more vicariously through them than adults would, because of their more sensorial way of being.
In his studies, Bettelheim highlights a very important fact: "Play reaches the habits most needed for intellectual growth", that illustrates how we can more efficiently reach children through fantasy and imagination than trying to be moralistic and didactic and how entertainment is a more certain way to achieve children's interests and comprehension. The same way a punishment can make a child obey the orders given by an adult, but at best it will only teach an obedience to authority, instead of giving a guidance to self-control which enhances the self-respect. The child, so much more insecure than an adult, needs assurance that his need to engage in fantasy, or his inability to stop doing so, is not a deficiency - and not only the child but it's important to adults understand that the child's imagination it is imperative to his self comprehension and intellectual growth.
If you've experimented reading the same book in different ages of your life you may recognise that you've seen things better or understood passages with more depth on the second time - that is because you now have a more realistic view of life, having matured with life experiences. That doesn't mean that children are stupid, it only mean they view the world in a different way, or haven't seen the world like yourself yet - remember that because one of adults' biggest mistakes is underestimating children's intelligence. Children are constantly changing, and the books that intrigue them change with their age. Another common mistake made by many adults is thinking that their children will be traumatised by reading fairy tales in their original writing because it's too explicit. "The unrealistic nature of these tales is an important device, because it makes obvious that the fairy tales’ concern is not useful information about the external world, but the inner process taking place in an individual". Bettelheim defends that not only children but people at any age tend to ignore what they are not ready to understand.
To illustrate it better, I will put it this way: the same way a child can understand the world through fairy tale an adult can understand life events through a metaphor. Try to think it as reading a sentence that contains a word you don't know the meaning. You might try to understand it by how it's presented in the sentence, later on you might want to look or ask for its significance, and one day if you are fortunate it can mean something personally to yourself so you can fully comprehend . But meanwhile, whilst you are reading your book, you'll just ignore that word for that moment so you can move on. This is how children function, and it's also how we mature.
In overall, our responsibility with communicating with children relies upon our approach to their own understanding of the world, matching their interests and neediness.