User blog comment:EvanDude345rv5/Fairy Tail 344: Erza is a child again, WTF ?/@comment-7418318-20130719193322/@comment-7418318-20130722065407

"That can also be a possibility but if that's the case, wouldn't everyone in the village also be children to that degree given they appear to come close to the flames at one point?"

Not necessarily. Giants might be immune.

Or maybe it's just something that you can figth through with time, which might even be used as a rite of passage by the giants. If the others have to free you from the illusion, you still count as a child and once you manage to resist it, or free yourself from it without assistance you are considered an adult.

Or if the flame is conscious it might have chosen to do this to Erza (or tried to do something else, with that illusion being a side-effect).

Come to think of it, maybe it's Minerva's "new power" that was refered to in the last chapter. Actually turning Erza into a child or "only" making her believe herself to be a child would both make her easier to beat.