But a new German study suggests our canine companions have a better idea what we're saying, thanks to an ability to figure out words through context.

If the suspicions of the study authors are correct, dogs and human toddlers share a technique involved in language development. But one critic says that's hardly breaking news and called the findings "overblown."

Rico – an exceptional dog
The debate centres on Rico, a 10-year-old Border collie who lives in Germany and has reportedly developed the ability to quickly understand human words. He has an estimated vocabulary of 200 words, mostly referring to toys and balls.

Researchers from the Max Planck Institute for Evolutionary Anthropology developed experiments in which they placed a new dog toy in his home among seven toys Rico is familiar with. His owner then asked the dog to find the new toy in a series of rooms by announcing, "Rico! Where is the [new toy's name]?" in German.

Seventy percent of the time - much more than mere chance would predict - Rico picked the right toy. He even did a good job of remembering the names a month later. "What really amazed us was that he was able to memorise this relationship [between the toy and its name], although the toy was locked away for four weeks and the name was not mentioned during this time," said study co-author Julia Fischer. "Granted, he was not perfect, but neither are three-year-old children or adults, for that matter."

"Fast mapping"
The researchers think Rico figures out the words by using a strategy called "fast mapping" that lets him quickly figure out that a new word goes with a new object. "We know children can do this - if they hear a word just once, in the course of a conversation, they can remember what it means weeks, even months, later," said Paul Bloom, a psychology professor at Yale University who wrote a commentary for Science about the study. Children typically pick up the technique at age two, he said.

But Bloom added it's not clear that the dog has actually learned the word instead of merely a routine involving its use. "Children learn how words refer to things, and so can use and understand them productively. For a child, 'sock' can be used to describe a sock, to ask for a sock, to say he doesn't want to wear a sock, and so on," he said.

Another expert sceptic about results
LouAnn Gerken, professor of psychology and linguistics at the University of Arizona, isn't impressed with the study findings, which she said won't surprise anyone who owns a dog. Instead of being a sign that Rico can link new words to new objects, the results may just indicate that he got confused by his owner's orders and picked up the most interesting toys, which happened to be the new ones, she said. She added the study fails to report the potentially important words - "Good job, Rico, for getting the [toy]," perhaps - that the dog hears upon retrieving a toy.

"I don't see the results to be of any use or significance to the study of language development," she said. "I don't see it as serious science."

Are all dogs like Rico?
Back in Germany, researchers continue to ponder the mystery of Rico. Are all dogs like him? Or is he special, perhaps because he's a Border collie, a breed specifically developed to be human-friendly? "We don't know," Fischer said. "Maybe he is Albert Einstein in disguise. Or he is just a very motivated dog. We need to study more dogs to figure that out."

One thing is clear, however: Fischer and her colleagues aren't going to be looking at another popular household pet anytime soon. Felines, it seems, are just more trouble than they're worth. "I am sure that cats also pick up a lot, both about words and about other sounds," Fischer said. "However, clearly, most cats are not so keen on working with you, so it's more difficult to figure out.