Concepts are learned through experience. Children's first concepts are concrete, identified by sensory qualities. As we grow, we acquire more abstract or theoretical concepts by building on our earlier concrete ideas. For example, ayoung child may understand the concept of a "cow". Broadening on this concept, she may acquire the concepts of "farm" and "farm animals". A more abstract concept is "farming " and ultimately an older child will understand the concept of "agriculture", a completely abstract concept.
Children acquite concepts similarly to the way they acquire language. They apply labels and name things imitatively, like pointing and saying "dog". Through conditioning, children will generalize concepts (eg. saying "dog" for other small four-legged animals like cats and pigs) as well as discriminate between them (eg. saying "dog for animals that play with them, but saying "horse" for animals that people ride on).