"I want this to link here"
I spent 20 years conducting research on the development of children's humor, assuming that researchers and scholars would eventually come to an agreement on a definition of humor. However, agreement remains as elusive as ever. So I will offer you my own definition. In my view, humor is a form of play intellectual play, or play with ideas.
As you move up the phylogenetic scale (from simpler to higher order species), play becomes a more and more striking feature of animals' behavior. This is especially true when the animal is young, and when it is not threatened by the environment or biologically aroused. Play provides a means of learning skills that will eventually be crucial for the animal's survival. As higher-order species evolved, they inherited a general predisposition to play with any new capacities that were developed. So as we humans developed more abstract symbolic capacities, it was only natural to play with them. In my view, this is exactly what humor is a kind of symbolic play.
It is built into us to derive pleasure and joy from playfully distorting the world as we know it from turning reality on its ear. As our intellectual abilities grow throughout childhood, these abilities are reflected in the new forms of humor children are able to enjoy and create.
A separate form of humor has a different dynamic operating to determine what is and is not funny. Freud called it "tendentious" humor, because it reflects emotional tendencies or issues we have toward the content of the humor. So a simple joke can be made funnier just by using content that is emotionally salient. If a child has emotional issues regarding a parent or teacher, for example, a joke poking fun at them or a mishap at their expense might be especially funny. Similarly, emotional issues related to sex or aggression might make humor with sexual or aggressive themes funnier to adults. This dynamic explains why young children find words like "pee-pee," "poopy" or "ka-ka" so funny especially when they're just learning to control these functions. At a later time, jokes about sexuality or dating may be funny for the same reason. The developmental stages described below will not include changes in this kind of humor. However, it should be remembered that at all ages, those issues that are most emotionally salient will be particularly funny when alluded to in jokes or riddles.
It should also be noted that some of the benefits described below are of immediate value to the child's development, while others may not appear until the child leaves preschool to start kindergarten or first grade. Strengthening humor habits at the preschool level, however, helps assure that the later benefits will be achieved.