My lot love drawing. Especially my two year old. We have a roll of wide paper at home. Im not sure where is came from, but its great to tear off a strip and let them draw. It has lasted us years. Get your kids to decorate some of this roll to make your own wrapping paper.
Maybe their creations are just scribbles. Maybe they are doodles you can recognise. Either way, I guarantee grandparents and extended family will love their Christmas grift wrapped in a piece of art from your little ones.
If you want to keep it festive. Why not get some festive stencils to draw around. Or some festive stamps. If you have the motivation to get the paint out, create Christmas shapes from sponges or potatoes, and stamp regular patterns. This is particularly effective with slightly older children.
Get creative, and keep the kids entertained for a bit.