To combat this, when my daughter was little, I told her she only got to ask Santa for 3 things - 1 big, and 2 small. Anything else Santa brought was up to him. Of course "big" is subjective and so was completely under my control (I am "Santa Mom" after all!) - when she'd mention a gift, I would say "well, put it on your list as the BIG item" or "you should put it on your list as one of the small items". I also maintained veto power on any and all list items - told DD Santa would call or text me what he was bringing ahead of time for my approval
Anything bigger than I wanted to pay for (cough cough...American Girl Treehouse...cough cough) I would just let DD know would be veto'ed for some reason (not enough space, too expensive to maintain, unsafe, etc) and so she'd take it off her list and move onto the next thing. All of that helped keep expectations under control but it never seemed to dampen the thrill of Christmas for DD.
DD is now 16, and is allowed to make a longer list, but knows that both Santa Mom and her aunts/uncles may or may not choose to get items off the list - it is just meant to be a helpful tool to let people know the kinds of things she is into. She also knows I still retain veto power over all items on her list (no, overindulgent aunt, you CANNOT buy her a car). Santa Mom still tends to bring one larger, more expensive item (think electronics), but not always - the budget varies year to year. The "big" gift this year is going to be a new smart phone, but not an iPhone or Samsung - one that is more reasonably priced ($250). DD is truly happy with whatever she gets - I think the ground work you lay in that regard when they are little is important in driving that.
