If you say "children were playing in the street", we are clearly talking about young people.
If you say "that woman has two children" we are talking about a biological parent/child relationship and the children are still children of the parent even if the children are 80 years old and the parents are long dead.
Perhaps to get away from the youthful aspect of the word "child", at a certain point, maybe when the children are around 20 or 25, parents tend to talk about their sons and daughters, rather than using the word "children".
Even "grown children" sounds a bit like these adults are still children. Perhaps they are 30 years old and still living at home, for example.
This is perhaps more information than you wanted to hear!