This paper addresses theoretical problems arising from the vagueness of language terms, and intuitions of the vagueness of the concepts to which they refer. It is argued that the central intuitions of prototype theory are sufficient to account for both typicality phenomena and psychological intuitions about degrees of membership in vaguely defined classes. The first section explains the importance of the relation between degrees of membership and typicality (or goodness of example) in conceptual categorization. The second and third section address arguments advanced by Osherson and Smith (1997), and Kamp and Partee (1995), that the two notions of degree of membership and typicality must relate to fundamentally different aspects of conceptual representations. A version of prototype theory--the Threshold Mode--is proposed to counter these arguments and three possible solutions to the problems of logical self-contradiction and tautology for vague categorizations are outlined. In the final section graded membership is related to the social construction of conceptual boundaries maintained through language use.