When your baby turned 1, she probably knew a few words already: some version of "mama" or "daddy" (or both) and maybe a word or two to designate other objects important in her day-to-day life, like a cat, dog, bottle, cracker, and the names of her siblings or caregiver. By the end of the second year, your baby's handful of words will have blossomed into somewhere between 100 and 200.
What characterizes language development between 12 and 24 months? During the first half of the second year, your child will gradually acquire more words. In addition to objects and people in his world, he'll learn the words for important actions: "up" and "down" (as in "Pick me up" and "Put me down"). The words your baby learns reflect both his experience and his temperament. Active babies, research shows, are more likely to add verbs to their repertoire than are more passive infants.
Then, somewhere around 18 months, there is an explosion of new language development. New words are acquired more rapidly now than at any other time in your baby's young life. This acceleration in language learning is accompanied by another new development: the use of combinations of words to convey a message. Now, instead of simply demanding "Milk!" your baby is likely to ask for "Milk, Daddy!" or to reject the toasted bagel you give her with the words "No, hot," instead of tossing it to the floor. By about 24 months of age, most kids will commonly speak two- and three-word sentences, though there is a wide range in normal language development.
In a sense, your child has two vocabularies at this point. You may hear your pediatrician refer to these as "receptive" and "expressive" language. Receptive vocabulary refers to the set of words your child can understand when he hears them spoken by others. Expressive vocabulary refers to the words he can actually produce himself and use to communicate. For instance, although your child cannot say, "Come to the grocery store with me," he will probably understand what you mean when you invite him to do so. Your child's responses when you talk to him should indicate that he understands much of what you are saying to him.