One of the most important things to consider is that toddlers need a lot of attention and soon get bored and into mischief if they are left to their own devices. Therefore, you will need to devise, create or choose party games that keep their attention. Any games that include "doing things" are always popular. Singing, clapping and dancing games usually go down well and will tire the toddlers out, which means they have less time to devote to mischief making.
If you are holding the party in sunny, warm weather then you can arrange the activities to take place outside, otherwise indoors. But how about holding the toddlers birthday party in the garden in a tent? You don't need to buy one specifically; you can borrow one from a friend or even hire a small gazebo or marquee that is large enough to take care of your needs. Children all love tents or Wendy houses, etc., so this would be perfect, as long as there isn't too much running round needing a lot of space. So, here are 4 games to play for your toddler's birthday in a tent. You may of course have other ideas up your sleeve, and that's ideal. Remember to try to rig it so that all the children get a prize for something.
Musical (or dancing statues)
Children love to move around, so you can have musical statues. You will need to explain the rules to the toddlers and sometimes you might need to show them, especially if they have never played anything like it before. You must ensure that you always give a prize to the winner.
This is a sitting down game (bet that doesn't last!). Find or create a small story or adventure based around a farm and give the children a noise associated with an animal. When the story mentions that animal the child has to make the appropriate noise. This helps to encourage listening and interaction skills too. However, don't make the story too long as toddlers can't tolerate anything approaching "War and Peace."
Painting, sticking & coloring
All children like to get involve din art projects, so you could set up a corner of the tent or gazebo and dedicate it to sticking, gluing and painting. Of course, you will have to ensure you have plenty of wipes for painted fingers if you don't want to get the paint everywhere. You can buy bulk supplies of items to stick onto paper to create pictures. Don't make this session too long though as not all children enjoy sitting still for so long.
This is a great game that all children love. You will have limited places to put the hidden items in a tent, but that is fine as the children are only toddlers and sometimes hiding things in plain sight is enough.
So these are just a few ideas that you can use. There are lots and lots of other fun games you can play, but remember to keep it simple and quick for toddlers, as their attention span is very short.