Anything can be a craft at that age, and it's great to let them explore their own creative ideas as well as doing structured crafts. We gave up on structured crafts (as cute as they are) because my oldest always wanted to do what "she wanted to do" with it...very sweetly, I might add. She's a doll.
So we have lots of boxes filled with EVERYTHING...material, felt, pom poms, jingle bells, markers, glitter, glue, crayons, paint, every kind of paper imaginable, pipe cleaners, popsicle sticks, feathers, beads, googly eyes, styrofoam falls, ribbons, rubber bands, that plastic stuff that looks like a grid that you can cut and yarn together (can't think of the name!!...but my Grandma made us a whole set of Barbie furniture out of it...) yarn, cardboard, stickers, stamps...oh, and that's just the start of it. I honestly have tubs full of craft supplies (organized into smaller boxes inside) and she's allowed to use whatever she wants.
My problem is not knowing what to do with all the stuff she creates. I don't want to throw any of it out...but it takes up a LOT of space. :)