For decades the importance of background situations has been documented across all areas of cognition. Nevertheless, theories of concepts generally ignore background situations, focusing largely on bottom-up, stimulus-based processing. Furthermore, empirical research on concepts typically ignores background situations, not incorporating them into experimental designs. A selective review of relevant literatures demonstrates that concepts are not abstracted out of situations but instead are situated. Background situations constrain conceptual processing in many tasks (e.g., recall, recognition, categorization, lexical decision, color naming, property verification, property generation) across many areas of cognition (e.g., episodic memory, conceptual processing, visual object recognition, language comprehension). A taxonomy of situations is proposed in which grain size, meaningfulness, and tangibility distinguish the cumulative situations that structure cognition hierarchically.