Depending on the size of the home, some families may have both a living room and a family room. For others, these terms may be interchangeable. I consider living rooms to be more mature, slightly more formal in nature, whereas family rooms are kid-friendly and casual.
Essential characteristics for a successful space: comfortable seating, appropriate materials, and extra pillows or blankets for snuggly moments. Carefully consider what activities this room must accommodate as well. For example, include a side table and lamp for reading, flexible furniture arrangement for morning yoga or family dance party, and storage for board games/movies/books/etc.