No doubt if you have small children you've probably had an influx of new toys from your recent Christmas celebrations. Take advantage of this time to sort through the "old" toys and decide which ones are rarely played with or often the source of fighting. Toss these toys in a box and either drop it off at your local Goodwill/Salvation Army/thrift store, or set it aside for your next garage sale.
If your children are old enough, have them help you sort through the toys & make the decisions about which ones to donate. Explain to them that another child will love to have this new toy, so they will learn that donating un-needed items is a good thing!
If your children are still too young to understand that, it might be best to do this after they've gone to bed or while they are napping...they probably won't miss the ones you've taken anyway. If you're worried about that, put the donation box in the basement for a week or two & see if they ask for any of those toys. If not, donate as intended!
Also, if after sorting through all of the toys you still find that your toy space is way too cramped, consider starting a toy rotation. Simply grab a large tote or cardboard box & toss some toys in it....and after a month or two bring those toys back out & put different ones away for awhile. For young kids, it can be like Christmas all over again!