One of the reasons they encourage visitors to stay on the trails is so that they don't wander onto any cryptobiotic crust. "Cryptobiotic" means "hidden life" and these lumpy, living colonies of microorganisms, algae, lichen and whatnot help keep the desert surface from washing or blowing away and give plant life a fertile, friendly place to germinate and flourish. It's very fragile and some types take many, many years to form. Step on it and you've just wiped out 10 - 100 years of growth. It usually looks like a bumpy black fungus covering large or small areas of ground but some kinds are difficult to recognize or are just starting to form.
It doesn't usually form on solid rock so as long as you stay out of vegetative areas you should be good but keep your eyes open?
While the overlooks are beautiful, most are on the edge of long, long vertical drops. There are protective barriers around these spots but it's very, very easy for curious youngsters to wander off onto unprotected sides or to crawl up on the walls so you'll want to keep a sharp eye on 'em.
This goes for big people as well: occasional gusty winds and crumbling edges are good reasons to stay away from the edge.
The closest meals are at the Thunderbird Lodge Cafeteria (near the Visitor Center) so it's wise to pack drinks, snacks or a tailgate picnic. There are also no restrooms along the rim drives/overlooks so make a potty stop at the Visitor Center before before setting out.
Canyon de Chelly is a wonderful place for children to enjoy some beautiful canyon views. Unfortunately, children sometimes have minds of their own and can wander away from you pretty fast. Only a handful of locations at the park are toddler safe, and mainly that is the visitors center and picnic area. Almost every single scenic outlook has potential for danger if your children are out of sight for even a second, so make sure you have an eye or hand on your children at all times in this park.
Here is a picture of Anna doing a little rock climbing. This outlook was the only one that had a well built brick fence, and enough room for contained wandering. We also had both parents actively watching here to make sure she did not slip out of sight.
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