How do I explain the concept of Teshuvah to my 8-year-old?

I like to use the eraser. A pencil comes with an eraser built in — not because we expect to write perfectly, but because everyone makes mistakes and the mistake is not the end of the page. Teshuvah is Hashem building an eraser into the world.

And model it. The most powerful drasha on teshuvah an eight-year-old will ever hear is watching you say "I was wrong, I'm sorry, I'll try again" — to her. When she sees that grown-ups do teshuvah too, it stops being a punishment and becomes simply how good people live.