The aim of this paper is to provide a short history of the changes in Ferenczi's concept of early childhood, during the two decade period, 1913-1932. Initially, Ferenczi mainly emphasized children's feelings of omnipotence, which enable them to perceive themselves as strong, independent and capable human beings. By the mid-1920s, however, he felt that his earlier work did not give a good account of what comes after the stage of omnipotence, and that it did not adequately describe the difficulties in the transition from pleasure to reality principles. However, in his Clinical Diary, Ferenczi became fully aware of how fragile and insecure children are, and therefore how dangerous—yet necessary—it is for them to abandon the “stage of omnipotence” and to gain a “sense of reality”. For Ferenczi, traumatized children are children who had not been loved in their early childhood, and therefore could not develop the capacity to make the journey from pleasure principle to that of reality. It will be suggested that a paradigmatic example for this kind of child is Peter Pan.