Piaget's theory of cognitive development proposes that children progress through four distinct stages as they interact with their environment. The stages are sensorimotor (birth to age 2), preoperational (ages 2 to 7), concrete operational (ages 7 to 11), and formal operational (age 12 and up). At each stage, children demonstrate qualitatively different ways of thinking and reasoning. While influential, Piaget's theory has some limitations, such as underestimating children's early cognitive skills and not fully accounting for social and cultural influences on development.