Language refers to your child's ability to understand and use language in order to effectively communicate. All children develop differently, however, typically by the age of three your child will be able to understand two to three step directions. So now is a good time to not only ask them to maybe get their shoes and put them in the closet, but now you could say, get your shoes and your coat and put them in the closet please or bring your cup and your fork over to the table and they'll be able to follow those simple instructions.
Again keep the language simple, but three step instructions is really where they're at, at this point. In addition, they're now understanding I, we, me, you and you should use that. So instead of saying mommy, you should say, I want you to please pick up your coat. So you should use that language because they are now understanding that language.
Your child also is now able to name their friends which is really fun when you talk to them and they should be able to say who their friends are and they should be able to say that they are girls or boys. This is really a fun age where language is emerging and you should continue to encourage language through the use of books and through the use of games, matching games, using puzzles and any kind of way for you to talk to them and ask them questions and have them respond. It's really great at this age.