Children's need for privacy grows as a function of their growing appreciation of themselves as social objects; one among many individual people. According to developmental theorists such as Robert Kegan whose work concerns the development of identity and social maturity, children are not born able to distinguish between self and other. Rather, the sense of self is something that children develop as they grow increasingly aware that other people are separate beings from themselves with very different needs and points of view. Children's need for privacy is something very much linked to the development of this sense of self as separate from others. Babies have no use for privacy as they don't recognize that other individuals exist, but as children grow and increasingly do appreciate that other people exist, so too grows their need to be able to keep things secret from those other people.
By middle-childhood, children are very much aware of themselves as individuals who participate in a variety of social groups comprised of other individuals. Their awareness of themselves as group members (and therefore as social objects) only grows sharper as they attend school. Correspondingly, middle-childhood aged children need to have some area within their homes that is their own private space and which they can expect to control.
There are a variety of ways to offer children privacy and control over private space. Some families offer their children individual bedrooms, but other families do not have resources to provide this option. In cases where siblings must share a bedroom, parents should work to make sure that each child still has some personal space they can control (e.g., their own bed bunk, their own drawer or drawers in the dresser, or their own plastic storage tub in the closet).
Whatever their form, children's personal, private places should be, to the greatest extent possible, under their own control and actually private. Other siblings and even parents should not use or go into those places without the child's permission. Of course, there need to be exceptions to children's privacy privileges as necessary to provide for children's safety. Children should not expect that they can hide drugs or other contraband or unsafe materials in their private space and get away with it, for instance. However, where safety and other emergent needs do not trump privacy needs, children's private spaces should be respected. Parents should not go snooping around reading children's diaries, for instance. Private spaces become understood by children (and by adults as well) as extensions of themselves. To invade a child's private space without the child's permission or a truly good reason is tantamount to invading the child's sense of self. Children subject to unnecessary invasions of privacy are likely to feel invaded. This will hurt the bond of affection and respect built up between children and parents and weaken children's confidence in parents' appropriateness to function as trusted guides and advisors.
