As seen on lw there are many misconceptions about what literacy entails. There are some people who even attempt to go as far as trying to say that literacy is only about spelling. Last term I had to take a reading course, which at first I thought was just going to be some liberal propaganda course they force you to take. The class ended up being a really fun class for the most part.
The first few weeks of the class focused on what was literacy and how to help teach children how to read. What the various stages in reading development and the different psychological approaches towards reading instruction.
One of the more intereasting things that we covered was something called the Framework for Reading Comprehension. I went to the site that came up with this and took a little bit from there basically because people need to understand the various components that help establish literacy.
The framework SEDL is using in its RCI work (see illustration, below) depicts the knowledge domains that a child must master to successfully learn to read English. The domains and their relationships are derived from cognitive research conducted over the last two decades which have been synthesized into a simple view of reading by Philip Gough and his colleagues at The University of Texas at Austin. At the apex of the framework is reading comprehension-the ability to construct meaning from printed text. Underlying reading comprehension are two equally important elements that research has demonstrated are essential to reading-the ability to understand language and the ability to decode the printed word. Children who have reading difficulties have been shown to have deficits in one or both of these areas. Both language comprehension and decoding are composed of a collection of more fundamental knowledge domains that have been shown to be essential to the successful acquisition of reading, such as having a rich and relevant vocabulary and grasping the alphabetic principle. Cognitive research has made important contributions to early literacy by establishing predictors of success and failure in reading and by reinforcing the need for early intervention for struggling readers.

http://www.sedl.org/pubs/sedletter/v11n01/3.html
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