Winter season is the best time for Daman n diu. most people visit only Daman but if you're planning for a week long location then try to cover diu also. I personally won't prefer a family vacation to Daman. it's more of a friend's trip destination.
Daman and Diu is a place which can total surprise It's tourist, a place where you want to get lost. Yes, it is one of the best place for family trips.
Best time to visit Daman and Diu is from October to March. It is the perfect season as the weather remains pleasant during this time.