I get this question all the time. Whether or not they have kids or have years of teaching experience or read hundreds of books every year, a lot of people don't know the difference. And that's okay, because next year the category names will change or two new ones will appear or we'll stop reading altogether and just have information digitally implanted in our brains.
Picture (ages 0-6)With such a large age spread, there are many sub-groups within picture books that span from board books to emergent readers. Including story (narrative), novelties (nontraditional layout), informational (nonfiction) and concept (ABCs and 123s), picture books generally have 24 or 32 pages and contain around 500 words. While their rhythmic patterns and recurring themes are good for speech and reading development, they are designed to be read aloud and encourage interaction between the reader and child.
Early Reader (ages 6-8)Often seen in series, these books generally have simple plots with larger font and possibly a few black and white illustrations. They are also referred to as independent readers or beginning chapter books, though children benefit from reading them with an adult. Capping out at 100 pages or so, they usually have between 2,000 and 10,000 words. While children advance quickly through these books, they are critical for reading development.
Middle Grade (ages 8-12)Sometimes called juvenile or JV books, these are what people often think of when they think of children's books. They tend to have more literally themes and deal with more complicated issues. With 20,000-40,000 words and about 200 pages, they revolve around more diverse characters with a more dramatic story arc.
Young Adult (ages 12-18)These books often get passed over for classic novels as teens begin to do more analytical reading for school, yet they still sell well and adults love to read them as guilty pleasures. The word count can range from 20,000 to 200,000 words, but publishes tend to think 55,000 at 250 pages is the YA sweet-spot. They are the children's books most susceptible to publishing and cultural trends.
It's vital that children are exposed to as wide a variety of books as possible. Some kids like to read fiction while others prefer nonfiction, and many children still need to partner read with an adult all through adolescence. You might not like that your child wants to read graphic novels or magazines, but that might be what you need to let them do to keep them reading. Letting a child guide their own reading choices while still encouraging them to stretch themselves is an incredibly difficult balance to find. But if children can graduate high school loving books, they become life-long readers.