I've got an 11 year old son and a pair of 6 year old nephews and a 3 year old niece. A couple of FRS/GMRS radios set on an FRS channel work well.
Make sure whatever radio you pick has the following options:
1. Takes standard AA batteries or comes with a rechargeable pack with charger. Kids forget to turn them off, so run down batteries are a reality. If not rechargeable, make sure you get something with "normal" batteries. AA batteries hold more juice than AAA, so more time using the radios.
2. Make sure it has a "lock" function. This allows you to lock the radio on a single channel, squelch code (aka Privacy Tone), etc. Kids naturally want to push buttons, and more often then not they'll get off on separate channels. This causes frustration.
3. Durable. Kid proof.
4. Cheap. They are going to get lost, broken, run over, dunked in a puddle, etc. Might as well accept that now. You will be replacing them. Maybe even buy a couple extra. Remember to keep one with you to monitor what's going on and be able to call them back if they get to far afield.
5. If you do go with the FRS/GMRS radios, remember that GMRS requires a license. The FRS channels will run at lower power to stay within the rules. This is usually way more range than a kid needs, plus the lower power drain means the batteries last longer.
Some of the most fun I've seen my son have with his cousins is with a couple of walkie talkies and a couple of flashlights or glow sticks. Get them out camping and let them loose. Imagination takes over and fun begins. Seeing them running around in the dark with the flashlights, talking on the radio is pretty dang entertaining.
If they enjoy it, then as they get older introduce better radios. But start with the inexpensive stuff. Important part is to make sure they are "kid proof" and will have the lock function. Nothing turns a kid into a crying mess faster than when the frustration sets in. Although I'll add that the 3 year old niece will be quite happy when she's just got any radio, even if it doesn't have batteries in it. She thinks she's playing, and that's all that counts.