Purchase a tshirt the appropriate size. If you want to do a dropped waist just cut off the tshirt hem, if you want to make the skirt higher up just measure from shoulder to waist and allow about 12mm-1/2" for the seam.
Cut 2-3 different colours, or add some tulle or organza for a pretty look. The width of the layers will depend on how long you would like the dress and how tall the child is.
Cut 1x12cm 1x15cm, the width of the fabric 110cm, for smaller sizes only use about 70cm, hem or roll hem on the overlocker all layers then place all the layers together and gather on your machine or overlocker to the width of the base of the tshirt. Join seam and then attach to the tshirt with machine or overlocker. Any scraps left over use for an applique or make a pretty bow. Edge hems with braid or ribbon or use a fancy stitch!
This is only a guideline be creative and feel free to add your own ideas :) Happy Sewing :)