It is its room -- very odd; parents should know their child's ***. Much better would be This is his/her room.
PS: I now see that your question is in your subject line. Yes, a child can be referred to as it, for a brief time, before one is told its name. Then it is best to call it him or her
The rules are the same whether you are talking about a child or an adult. It is rude to call anyone it unless it is really impossible to know the gender - for example enquiring 'Is it a boy or a girl?' or 'Who was it?' when someone answered the phone and you don't know who they were talking to.
Wih regard to using 'it' for a baby, yes, there are considerations of politeness. There are also considerations of 'distance'.
A doctor, for example, might refer in his notes to the child as 'it', because he is being clinical and has no emotional attachment or investment. Or I might say 'There was a small child on the bus and it threw up on my suit'.