Piaget's theory of cognitive development consists of four stages: 1) Sensorimotor stage (birth to age 2) where children learn through senses and physical interaction. 2) Preoperational stage (ages 2-7) where children develop language and imagination but lack logical reasoning. 3) Concrete operational stage (ages 7-11) where children develop logical thinking skills and understand conservation. 4) Formal operational stage (ages 11 and up) where children develop abstract reasoning and can think hypothetically. Piaget developed this theory by observing his own children and it focuses on how children construct an understanding of the world through experiences over time.