Through imagery and audio input.
The way I did it was to write out the word (starting with personal words like Mommy, Daddy, hand, arm, leg nose, etc.) in large letters (about 4") on poster board.
Or you can buy flash cards like I did with my son and cover up the picture while they learn the word. Then you use the image and the word together.
You make a game of it and you repeat the word while showing the child "the picture" of the word ('cause to them that's all it is at this point is a picture). At first you don't ask the child what the word says. You just say it and put the card away.
After a while the child usually begins to start to make the connection between the written word/picture and the spoken word. As they learn more words you expose them to more words. One thing to keep in mind is that as the child learns more you have to learn the look in a child's eye as to when they don't understand a word when asked. You speak out what the word is and don't give the child the time to make a wrong guess. It's a lot of positive instead of negative reinforcement ("No, that's not right." discourages a child) and understanding your individual child. That's also why it isn't a good institutional method.
As an adult when you hear the word "bird" you probably get an image of a specific type of bird in your mind. 
...and you may also get an image of the "whole word" bird as well. While a child is just learning an adult has had the experience of life to help fill in the gap between the two "images".
It was easy for me. It did require patience and knowing my children well. So no matter what anybody says it worked for me and my children and I've been proud of them as a parent when others stated how well read my kids were.
I guess the mileage varies for different folks, but saying outright that it doesn't work at all is BS.