There are several reasons that playing, watching TV, or even reading a book is important to children. Playing alone or with other children helps the child to develop important social skills, develop fine and gross motor movement, experiment with different identities (such as playing "teacher" or "store" or "doctor") and it helps them develop creativity. Play is actually the primary "job" of young children. It is one way that they can explore the world around them.
Watching TV can be good for children as long as there are some limits set based on age, time, and appropriateness of the program. Many children are auditory and visual learners, TV programs such as National Geographic, Sesame Street, and many others age appropriate programs give the child access to information that they would not normally have available. When parents or care takers are involved in watching these programs, the opportunity for bonding and developing communication skills is supported in a natural way. The parent/care take can use the program as a guide for discussion about what the child thought of it, what they noticed/liked/didn't like and so on. The child can talk with the parent about questions they have. Also, watching TV can potentially help in the development of neural pathways as televised images are rapid changing and require the brain to process information at faster speeds. TV can foster speech, language, and listening skills, demonstrate new skills or concepts, and many other benefits such as exposure to other cultures or ways of thinking. For example, the way I remembered "conjunctions" in English class was from the Saturday morning "School House Rock" that was on ABC. It is also how I was able to learn multiplication, political science, American History, and several other fundamentals such as the preamble to the Constitution.
Reading books is especially important for many reasons. Humans are very verbal and children have a natural curiosity. Reading to a child, or having a child read aloud to you helps them develop important communication skills. Reading facilitates important development of comprehension, letter and sound recognition, creativity, exposure to new ideas, and problem solving skills. It helps them to learn about the world outside of themselves, fosters relationships with others as books and ideas can be discussed or the time spent together reading, and for some children it can be a stress reduction activity as it encourages the child to learn to engage in activities that require sitting still or active listening. Furthermore, reading fosters creativity and imagination and encourages exploration. Reading is also good for children as regular trips to the library can instill the value that some of the best things are not expensive. Most libraries are supported through county taxation or public support so there is little to no charge for using them. Also, checking out books from the library encourages responsible behavior as the child learns to return them by a certain date and in good condition to avoid overdue fees (learning about natural consequences).