Every kid is different so I can only share my experiences with my son of 4 years and 10 months. He cannot build with Technic yet since he doesn't have the hand strength but is working with System/City/Creator just fine.
Avoiding frustration is key. Even though my son can follow the instructions for more complicated sets, his excitement turns to boredom then frustration if he repeatedly adds parts page after page and still can't recognize the component he is building. So, we focus on smallish sets or sets where recognizable components are finished often enough i.e. finishing a vehicle cab, finally adding wheels, installing a completed plane wing, etc.
Something that helped him really start to understand the potential of Legos is the Creator sets. Having a fixed set of pieces and seeing clearly all the different uses for these pieces... not sure how to describe it. It's like a light bulb went off in his head and can now come up with some decent build ideas. His understanding of the Lego instructions leaped, too. Once he gets into Technic I will introduce him to B and C models instead of buying many different sets.
A great moment we had is he got to build one of my old System sets and I bought a Technic set for myself. We assembled our respective sets at the same table, and we shared and talked about them as they were completed. He got to see how my set came together, how it worked, and now knows someday he will get to build it, too. He now has something to look forward too.