Stage
A stage is a subset of ship systems that are activated simultaneously. A stage can consist of a single part or even all the parts on the spacecraft, but all parts must belong to a stage. When the stage is activated all the functional parts contained within will become active. Engines will engage, parachutes will prime, decouplers will explode. When designing your spaceship putting every part into the correct stage is essential. An engine or a decoupler being activated out of step will most likely lead to a catastrophic failure. Staging happens in a linear fashion in Kerbal Space Program, meaning the stages can only be activated one after the other, from the lowest stage -the highest number- to the last or 'lander' stage -number one-.
Decouplers serve to seperate stages once they become obsolete. This usually happens when all the fuel contained in that stage is used up. When constructing a new ship the game will automatically create a new stage when you place a decoupler on your craft. However it can't follow the logic of the design process so by the time you finish you may have to manually reorder parts to the correct stages you want them to belong to. This happens by rearranging the icons in the staging process list on the right of the screen in the VAB. Here you can also create or delete any number of stages with no restrictions other than that a single stage must remain. You can also reorder parts to different stages on the launch pad or even mid flight, but here you cannot create or delete stages anymore.
Basic Staging Mechanisms
Merging Stages
Decouplers are generally used to seperate stages but you can create stages without decouplers in order to -for example- engage solid fuel boosters at just the right time without having to dump anything off your ship to do so. All you have to do is create a stage that contains only the boosters -or other parts you want engaged-. When such a stage is activated the previous stage will be merged into it, the booster now occupying the active stage with all the parts from the previous stage also remaining active. Once used up, the solid boosters can be decoupled by another stage containing only their decouplers leaving the rest of the active stage intact.
Gears, Ladders and Landing Legs
Not all functional parts are influenced by staging. Some of them can be activated and deactivated multiple times even if they are not in the active stage. As of 0.17.1 these include the LT-2 Landing Strut, Small Gear Bay, Telus Mobility Enhancer and the Telus-LV Bay Mobility Enhancer. These parts serve a purpose that requires repeated activation and as such can be engaged and disengaged at any time.