"Iny Miny Miney Moe" j/k
1. For reading words, I have started my oldest (two) on words that I have heard him say or that I know that he understands like, "play, outside, milk, brother, and car." for my youngest (4 months) I have started him on words that I say to him all the time such as, "milk, diaper, mommy, daddy, baby, and smile."
2. For other words, I usually try to fit some different subjects in such as insects (biology), tools, planets (astronomy), things around the house, music, maybe some art. It just all depends. Some of the words, my two-year-old just loves because they are on a subject that he likes such as planets or different types of tools. I try to be pretty varied in the approach.