It depends on the jurisdiction you are in. Some cities are not passing laws that make it illegal to take care of children without having a daycare license registered and on hand. Other cities treat the issue as basic babysitting. Your best bet is to take a look at your local rules to be sure.
It is legal to watch a child in your home without government intervention. Legally, you can watch several children without a license, depending on which state you live in, as long as they are from the same family.
Most states do not require you to get a license when you are watching children from one family, other than your own. This is because of the extreme burden it would place on babysitting. Some states however do require every babysitter to have a license. You would need to contact one of those government agencies.