findeight is spot on. Your division horses/ponies do the real “division” for their size (the regulars, sometimes called in ponies) and have the scope, step, and look to compete in the true division. Your children’s larges, for example, typically jump 2’6" and your regular larges can do the 3’. Smalls and Mediums do 2’ in childrens, whereas in the regulars they are jumping 2’3 and 2’6", respectively. Big difference in a pony, and likewise a big difference in cost 
Children’s divisions are not nationally rated and are considered “B” or “C” divisions in most Zones. They top out at Zone finals and accrue no national points.
Basically, a division pony/junior hunter is typically the look, size, step, scope, and style of your top of the line hunters, and your children’s horses/ponies can be, but typically are older, stepping down, helping a new rider get comfortable, or not able to be competitive due to height of fences for some reason or another. Children’s divisions are usually stepping stones to the regular divisions, but some riders stay in the children’s divisions for their entire junior and do quite well…nothing wrong with that!