I have a four year old girl and we have been doing a lot this year.
I have a spot in the barn where she has a big box of cut off wood, she also has paint and glue, and a tool bag.
My rule to her is that if she learns how to use it and cleans up the right way she gets to keep the tool.
She loves using the sandpaper, then glueing things and then painting the "castles" with acrylic paint. (I have a can with water and some rags for her to clean up). She also loves making fairy garden things. We made a ton of houses swings, and boats for her fairy garden planters.
With four I find that she is happy just being able to build, and get messy. She loves barn time. We also made a few bird houses, she painted them.