An excerpt from chapter 3 on Concept-Formation from Objectivism: The Philosophy of Ayn Rand by Leonard Peikoff.
So far, we have discussed first-level concepts, as we may call them. A “first-level” concept, such as “table” or “man,” is one formed directly from perceptual data. Starting from this base, concept-formation proceeds by a process of abstracting from abstractions. The result is (increasingly) higher-level concepts, which cannot be formed directly from perceptual data, but only from earlier concepts. For example, a child may integrate first-level concepts into wider ones, which identify more extensive knowledge, such as integrating “cat,” “dog,” “horse” into “animal” (and later, “animal,” “plant,” “man” into “living organism”). Or he may subdivide first-level concepts into narrower ones, which identify more precise differentiations, such as subdividing “man” according to profession, into “doctor,” “policeman,” “teacher” (and later “doctor” into “children’s doctor,” “dentist,” “surgeon,” etc.).
Higher-level concepts represent a relatively advanced state of knowledge. They represent knowledge available only to a mind that has already engaged in the requisite conceptualization. For instance, …
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