Yes, it is better to read the book before watching the movie. Reading is important and educational. People with large vocabularies credit reading as the major reason why. Watching a movie is pure entertainment. While a particular book does not always line up with the movie, it is still better to read the book first. It exercises the mind. When the movie version lines up with the movie that your brain created while reading, it is a rewarding feeling. When movies seem subpar compared to the book, the reader is left with the satisfaction of the rewarding book. Different people find different values in entertainment. Reading stimulates the brain in ways watching a movies cannot. People that read the book first will still continue to watch the movie version with high hopes. Even if it disappoints, they will continue to support their favorite books in the movie theaters.
Yes, it is better to read The BFG before watching it at the movie theater. Reading the book with children first can help them to develop a love of reading. Watching the movie after reading the book can help them to understand how stories can come alive through film. They can also try to identify how the movie differs from the book, which can provide them with additional learning opportunities.
I am a firm believer that you should always read the book before the movie. Often times the two are quite different, and if you watch the movie first, you aren't as capable of producing mental images without thinking back to the movie and the actors in it. I say this with any book that has been turned into film, not just this one.
The BFG is a beloved children's book, but it is my opinion that anyone can enjoy a good family film without having read the book. Those who have read the book will probably enjoy it more, just being able to see the characters come to life. However, as it is a movie that caters to children and families, it is likely that many of the children watching it will be too young to know the story. If the movie is good, they will enjoy it anyway.