Here is a great article I found:
http://www.babycentre.co.uk/toddler/penelopeleach/playtoysandactivities/Copy pasted here
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Toddler
Penelope Leach on toddlers
Toys and activities for your toddler
Toys and playthings
Natural materials
Useful toys
Play activities
Written by childcare expert and author Penelope Leach
Toys and playthings
Toddlers will play with whatever is available to them. They need raw material to explore and experiment with, but they do not (yet) care whether it comes from a toyshop, is passed on by a friend or is assembled from junk materials. It is impossible to generalise about which of the thousands of available toys your child should have because it depends what she already has, and chooses to spend time on. But there are various types of plaything that every child will enjoy and learn from in one form or another during this age period.
Natural materials
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If your child is to understand the world and how it works, she needs to know which materials are natural and where they come from. If you live in a flat and don't have a garden, your child won't acquire that knowledge automatically. It's up to you to make sure she realises that concrete is artificial and that not all water or milk comes out of taps, bottles or cartons. And it's important to give her different materials to explore, and to tolerate messy play, so she can discover how they behave.
Water play: Play with plain, bubbly, coloured, warm or cold water will teach your toddler that it pours, splashes, runs, soaks and feels cold in the end even if it's warm to start with. If she blows, it bubbles. Some things she puts in it float, some sink and some dissolve. It can be carried in things with no holes, but it leaks through a sieve or cupped hands and seeps through fabrics. The child will play in scale with the quantity you provide, so while a paddling pool is glorious and a bath is obvious, a washing-up bowl on lots of newspaper, with small containers to fill and empty, and extras such as ice cubes, food colouring or a whisk, is good, too.
Earth and clay: Natural versions of these materials are so messy that children are usually given playdoughs, instead. However, part of the unique value of clay lies in its brown messiness. Your child needs to discover -- and be able to enjoy without shuddering -- the way it squidges gloriously in the hands yet can be rolled and pounded, shaped and moulded. Soon she'll realise that more water makes it sticky, less makes it too hard to handle, and drying out changes it into a solid.
Shop-bought or home-made playdough is a superb play material, but children really need to have it as well as, rather than instead of, clay.
Sand play: "Washed" or "silver" (not builders' sand which might contain cement) links water and clay or dough play because wet sand behaves rather like dough but with interesting differences, while dry sand behaves like water but is different again. A solid that is not solid and a liquid-like substance that is not liquid. Again, scale matters more than quantity. A beach is heaven and a sandpit (with a cat-proof lid) is an excellent buy for the garden, but a couple of kilos of sand on a tray in the garage or even in the kitchen can light up a winter day. Failing sand, a kilo of rice is sometimes a worthwhile gift. Provide spoons and containers in scale and encourage play "cooking" -- the first steps towards interest in the real thing.
Stones and leaves: Playing with these won't teach geology or botany; your toddler is not ready for that. But she is ready to observe that shiny stones dull as they dry, green twigs bend but later snap, and the world is full of fascinating shapes, textures and creatures.
Useful toys
Blocks: Building blocks will be part of her play for several years and she needs at least 60. Different colours are fun, but different shapes are more important. They must all be in scale so that tiny ones are quarters and small ones are halves. Tip them and they are higgledy-piggledy; put them end to end and make a line that may be a train or a fence or a pattern; pile them with the smallest underneath and they fall, build on the largest and they stand.
Fitting and stacking toys: Different versions of these help her discover -- and prove to herself -- that round balls will not go into square holes; big things will not fit smaller ones; complex shapes only fit together if the angle is right. There is scope here for making as well as buying. Your child will use a first "post box" made by cutting block-and-ball-sized holes in a cardboard carton, weeks before she can manage the simplest one from a toy shop. Plastic beakers that will build up or fit inside each other as well as being used in the bath are a cheap and easy version of many stacking toys. Many kinds of "play people" that fit into holes on vehicles and playground equipment have a long and varied play life.
Formboards and jigsaw puzzles:You can create first "formboards" by cutting out dough shapes and helping your child put them back in the holes. She will probably also like a first jigsaw where whole figures lift out by a knob. Soon she'll be ready to tackle standard jigsaws with a few large pieces.
Hook-on and threading toys: Any hook and ring will join together; two hooks will too -- but two rings will not. Why? Your toddler may hook a plastic quoit with your umbrella or experiment with a train with simple couplings. Closed rings are fun to thread on anything long and thinner. Threading rings on a rod is fun; so is discovering the threading order that makes them a pyramid. Eventually she will enjoy threading curtain rings or cotton reels onto a piece of wool or a shoelace.
Play activities
Your child has to learn how things work and how to make them work; discover principles that seem obvious to us, and perfect fine manipulations that we don't even have to think about.
Filling and emptying: Filling cups with water or sand, paper bags with oranges or your handbag with small toys, and then emptying them out again, is an early step towards more sophisticated manipulative play. Along with useful manual skills your child learns how much water fills or overflows which cup; how many blocks fit into that box, and what happens when the containers are overturned. She needs lots of interesting objects, varied containers and patience from caring adults.
Sorting and classifying: Noticing the similarities and differences between things and learning to group them in her head, is one of your toddler's most important thinking-tasks. Grouping things with her hands helps her do it with her brain. Watch carefully and you will see your child beginning to identify all her cars as distinct from any other toys; later you will see oranges separated from potatoes. Later still, you may see her considering universal dilemmas, such as whether the apple goes with the ball because they are both round, or with the biscuit because they are both edible. Your child will sort and group whatever comes to hand but it's fun to have large collections of natural objects with less definite differences, such as stones or shells.
Manipulating objects: When your child builds on all those skills and learns to manipulate things, toys really come into their own. They must be well-made, though, so that once she discovers how two objects fit together, they do actually fit.
