Stress due to a new environment, divorce, changes at school; etc. can influence a child to grind their teeth. Another theory relates to pressure in the inner ear at night. If there are pressure changes (like in an airplane during take-off and landing when people are chewing gum, etc. to equalize pressure) the child will grind by moving his jaw to relieve this pressure.
The majority of cases of pediatric bruxism do not require any treatment. If excessive wear of the teeth (attrition) is present, then a mouth guard (night guard) may be indicated. The negatives to a mouth guard are the possibility of choking if the appliance becomes dislodged during sleep and it may interfere with growth of the jaws. The positive is obvious by preventing wear to the primary dentition.
The good news is most children outgrow bruxism. The grinding gets less between the ages 6-9 and children tend to stop grinding between ages 9-12. If you suspect bruxism, discuss this with your pediatrician or pediatric dentist.