A vocabulary is a list of words.
The vocabulary a person uses is all the words that person knows and uses. A person who is five knows 4,000 to 5,000 words. Adults who go to college may know 20,000 words. A hearing vocabulary and reading vocabulary are bigger than a speaking vocabulary or writing vocabulary, as people understand some words that they do not use.
The number of words in a language is more than the words listed in one dictionary. One dictionary may have a list of 500,000 (half a million) words. Another dictionary may have some other words that the other dictionary does not have. When you add all the words in those dictionaries, there are about 750,000 words in English. There may be more words than that.
You may think to yourself, "If there are 750,000 words, how can we talk with only 3000 words?" Because, we do not need to know all the words. You can say most things with around 3,000 words.
The vocabulary of a language is always changing. New words are made or words change their meaning. Words about computers, like "download" are new to the English language. The new word "bling" came from hip hop. Words like "cool" have developed new meanings.
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