a sit round gathering ?

...wie die Indianer machen. Ich weiß nicht, ob der Sitzkreis mit Kindern ist oder nicht, aber dann kannst du es auf jedem Fall benutzen. So hatten wir es bei den "Mini-Pfadfinder" (Brownies) genannt!!!
(native speaker)

...sitting circle, sit round gathering both sound very construed!

Ich kenne das Problem ... meine Kinder hatten immer Sitzkreis im Ki-Ga und ich konnte meinen Eltern nie erklären, was sie gemacht hatten!!!

why not simply "Let's sit in a circle" als instruction

taught German in England for quite some time. this sentence was also commonly used among my English co-teaches...

Klar ... so macht man das, weil es eben keinen bestimmten Namen hat! Aber wenn man das "sitting in a circle" einen Namen geben will ... wie von "art" gebeten ... gibt es eigentlich nur das Wort "Pow-wow" (we are good at borrowing words: Kindergarten, Creche)!!!

am not sure if "art" was looking for a noun only. the probelm with Germans trying to speak English is that they tend to use too many nouns where verbs would be more appropriate... :) just a thought...

one final remark... in this context it would be another classic example:

Lasst uns einen Sitzkreis machen = Let's form a sitting circle...

that's what I mean...

I know what you mean and "sitting" could be left out, but I do find myself having to explain a lot of things (with a verb) when there is a simple noun in German. It is very much a cultural thing - is it the Albanians who have 42 words for a moustache - obviously very important in their culture (?) although you can understand why eskimos have x-words for snow whereas we are happy with powder and slushy snow!!! Obviously sitting in a circle and communicating is/was not necessarily so important for us Brits!!!

Aus der Literatur ist der Begriff "cirlce time" bekannt. Siehe z.B. den Aufsatz re You "Sitting too Comfortably? A Critical Look at 'Circle Time' in Primary
Classrooms" Housego & Burns 1994. Ich rate auch mal den Begriff "cirle time" bei google Bildersuche einzugeben.

Although "Powwow" is a correct translation, it might be rather confusing if you use it in front of a Native American person. The word "Powwow" or "Pow Wow" (="Gathering") is commonly used for native Gathrings throughout Canada and the United States, where there's dancing,singing,drumming,... in traditional regalia (often in form of a contest). Some are small gatherings with a few families and the largest one in the world is the Gathering of Nations Pow Wow in Albuquerque, New Mexico.

I just wanted to metion this here... and if you have the chance one day- visit the Gathering of Nations in NM, it's a great event (takes place annually in April) :-)