Hi I plan go to Kunming-Dali-Lijiang-Shangrila on first week of December, two adult and one kid.

First of all, I would like to tell you that it is not during the peak season, so no need to worry about the crowds there. For your destinations, here is my general suggestion for an itinerary:
Kunming for around three days (Stone Forest, Dianchi Lake and World Horticultural Expo Garden) - Dali for two to three days (Dali Ancient City) - LJ for three to four days (LJ ancient town, Jade Dragon Snow Mountain and others) - Shangrila for around three days

Long-distance buses and trains (except LJ to Shangri-la) for these journeys are available. Just check ahead the bus timetable if you wanna travel on your own. If possible, book the train tickets in advance.

As your tour lasts a little long, I would recommend you join a tour. Then your travel agency would arrange everything for you well and you can just take an easy and convenient trip.

Hi Swan,
Thanks a lot. Please do recommend the reliable travel agency if available.

Oh, I recommend Travel China Guide to you. They arrange excellent tours for these destinations and I joined one in 2012. They have great reputation on TripAdviser. That's why I chose them. And yeah, they deserve it. Here is their contact for your convenience:
traveltravelchinaguide.com
May help!

thks