To share this information with your children I recommend a book by Paul Maier titled Martin Luther. I really like Paul Maier's books. They explain history and concepts well to older elementary children and the illustrations of this book are beautiful and captivating. You and your child will understand Luther better after reading this book.
Here is some more information about Luther:
"In his preaching and writing, Luther began to emphasize two main points:
justification by faith and the priesthood of all believers.Justification by faith means that Christians can never earn God's love or forgiveness. All that Christians must do is to accept [have faith in] God ...
The priesthood of all believers means that every Christian has his or her own personal relationship with God, reading the Bible and worshiping in his or her own language, and praying directly to God without anyone's going in between.
So Protestant Christians give thanks to God on this day for the
opportunity to lead lives of faith, instead of lives of fear."