The behind the scenes footage from TPM showed footage that made it seem clear that Lucas chose Jake Lloyd over other, much better child actors. How Jake Lloyd even made it to the final auditions might have been the fault of the casting director though.
IIRC from a Lucas interview, he had seen Jake Lloyd in something else on TV before casting.
Probably what this means is that Lucas had already made up his mind, so the casting director just did as he was told.