Authors use several methods to develop the characters in their books. Some include how a character dresses, what the character says (or how it is said), and how the character interacts with others.
After reading a story, use old Halloween costumes or items from your own closet to ask kids to "become" the characters in a story. This works especially well with more than one child.
Have the kids create a new scene from the story (or a sequel) and act it out to demonstrate they understand the nature of the characters they just read about.
For extra fun, make and edit a video of the scene using Windows Movie Maker or an app like VideoShop.