The thing with little kids is that so much of what they do/can do is based on interest. My oldest dd at 2 for example, did not have any real interest in puzzles. When she started liking them, she went from slightly behind average to ahead.
She couldn't recite the alphabet because she did not have any interest in letters as a toddler. She only knew a handful of capital letters when she turned 4. By the time she was 5, she was reading chapter books (not just Magic Tree House, but more complex ones).
This "test" would have subestimated her IQ, and I am sure it over estimates for many other kids as well.
