When trying to decide on a theme, I suggest keeping a few things in mind.
-In addition to the guest of honor's likes/dislikes, think about the venue where you will holding the event. Will they allow walls/ceilings to be decorating? Are you holding it in your house with limited space? Does your yard have the 'just perfect area' for that candy land castle you're imagining?
-Also, think about what resources you have to help you save money. What collections, toys, and decorations do you already have---or have access to? Don't be afraid to ask to borrow some things from friends or family!
-How many people are you inviting? If your child is only inviting one or two friends over for the night, a party with an elaborate theme with games and activities won't have nearly the excitement as an afternoon party with many friends and family members. Also, think about the ages of the guests. This sometimes make planning the most difficult.