You need to specify where in the orange box you would like the blue box displayed, otherwise the blue box will grow to the size of its parent.
Container(
width: 200.0,
height: 200.0,
color: Colors.orange,
alignment: Alignment.center, // where to position the child
child: Container(
width: 50.0,
height: 50.0,
color: Colors.blue,
),
),