how do we learn hierarchical relations between concepts? how does this apply to the self?

Kid in Dana Square park response to old lady saying he's so good with the "ball"

It's not a ball, it's a basketball.

He hasn't yet learned hierarchical categorization. The fact that a basketball is a ball.
[?] Have people studied this? What's the process by which we learn the relations between concepts?
[?] Is there an analogy with the self? (neurobiology of self)
- There's arms, and eyes, and hearts. Do we always think of this as "me"? Or is there some point when we learn that these are "part of me"?