The young girl had been attending the Hsinchu City International Kite Festival in the town of Nanliao on Sunday.
During the event, children gathered under a large, long-tailed kite which was supposed to scatter lollies when airborne, the secretary-general of the Asian Kite Forum Chen Ko-fang told Taiwan News.
She said the kids were kept at a distance while the kite was launched, but organisers did not anticipate the strong winds.
Footage of the incident shows the 3-year-old becoming entangled in the strings, whisked into the air and thrown around.