[Wow! I'm prolific today! writing in progress]
When one thinks of building vocabulary in a second language, word lists often come to mind because of their widespread use in courses, textbooks, and bookstores, that is to say in general in current second language acquisition practices. Unfortunately for the many people who use them, word lists are nearly the worst possible way to learn new vocabulary. I only say "nearly" because in theory there could be some even more counterproductive method; however, I have yet to encounter it.
But they're easy to use
Most people, myself included, are impatient and look for the easiest way to do something. Word lists seem simple enough: someone else tells you what words to learn, someone else compiles them for you, other people write quizes for them, they're easy to test so educators love them. This would be wonderful if languages were simply collections of words; unfortunately, for people who use word lists, they aren't.
Um, that sounds strage for some reason
When you learn words from a list, you don't learn how to use them. The classic example of this failing is "construction place". The definition in the Concise Oxford Dictionary of English says, "1 a particular position, point, or area in space; a location (a building or area used for a specific purpose or activity)", among other senses and variations. From this correct definition, a person learning the language doesn't understand that we simple don't say "construction place" in English. It's odd; it's weird; saying it basically marks you as a person who can't speak English. We say "construction site".
And another reason . . .
Most word lists contain a so called translation in the learner's native language. This just makes matters worse. If there was a one-to-one correspondence between words in different languages, this wouldn't be an issue. Once again, however, this isn't the case. (Disclaimer: word lists are less inappropriate for use between languages that are very closely related such as Portueges and Spanish, but still have the occasional problem. However, at present, I'm a native English speaker learning Japanese, but even when I was studying German which much more closely related to English this was a problem.)
Ah! if lists are bad, what should I do?
Learn the way your learnt vocabulary in your native language. How many words did you learn from a list in your native language? Two hundred, maybe five hundred if you really enjoyed amazingly boring study? This is somewhere between 2% of your vocabulary if you really liked lists and have a small vocabulary and 0.4% if you didn't like lists and have a large vocabulary. Gasp! How did could you possibly learn all those other words without lists? Context.
Because you learnt almost all of your vocabulary in context you don't have to think about using it naturally. Except when compositing a particularly obtuse sentence, you don't have to actively consider grammar or word choice. You say "construction site" not "construction place". You don't have to think about when to say, "On the way home, I stopped by the bank", or when to say, "On the way home, I stopped by a bank."
"But I spent 18 years learning words slowly in context and I don't want it to take that long in my second (or other) language." I agree completely; I'm impatient just list you. So we distill the process. Most words you learn aren't learned instantaneously: you saw it once, you forgot it, you saw it again a month later, you forgot it, you saw it again a week later and realized that you've seen it before, buy you still forgot it, you saw it again the following week and poof! it stuck.
We can condense the process by reducing the time between encounters with the word. In the past that would mean using index cards and writing down sentences and phrases that you think are interesting. Fortunately, in this age we have the computer; of course if you don't have convenient access to one, you can always fall back on cards. A computer can store all the sentences and phrases you've found interesting and show them to you when you want to review them. (This is just a system to make the process convenient and is a separate topic. I may write more on using such systems later or point you to others' explanations.)
Context
What does context mean? A word in a word list has no context; this is the least amount possible. You'll simply try to apply the context of the given so-called translation in your language, which is incorrect more othen than not. If we add a little context, we can look at some textbooks or phrasebooks that give you one sentence as the context for a word: 例文 (example sentences). Now you'll have an idea of how to use the word. Add some more context and we have a basic conversation, also found in a number of text books.
At this point, you may be tempted to use textbooks as a source. However, there are two rather glaring deficiencies. Even though the sentences are written by a native speaker, the content of a textbook is specifically toned down under the guise of helping the learning and making it easier to understand. While this is much better than a word list, it's still a far cry from the amount of contextual information you have when learning a word or phrase in your native langauge. Unfortunately, this often ends up producing sentences that sound very artifical and occassionally even unnatural. Sentence patterns (文型) have their place, but they're often used to the point of overkill.
Of the approximately 17 people here who have wanted to practice some variety of English with me once they find out I'm from Canada, there has been one person who managed a natural greeting. The other 16 were robotic: "How are you?" "I'm fine, thank you. How are you?" It's not a coincidence that they all used exactly the same wording. That's the example sentence found in virtually every English textbook around here. It's not that there's anything grammatically wrong with what they said. It's just that there is a very limited set of circumstances when a native English speaker will actually say that. And this introduces the second and far more serious problem with accepting the context that textbooks and other material for foreign learners.
The words, phrases, and tone that we choose are based on much more than a series of preceding words. What sort of personality do we have? What do we perceive the other person's personality to be? What's she wearing? What am I feeling? What sort of expression does she have on her face? What sort of place are we in? What happened last time we met? What's our present mode of speech and style? This sort of context is generally, and to the detriment of learners, ignored when learning a foreign language.
Context is everywhere
Anything that a native speaker is exposed to is suitable for context. Movies, television show, hanging out, warning labels, instruction books, novels, essays, novels,
[writing in progress]