There is no exact definition to what exactly constitutes
a "stage" but here are some guidelines:
Stage1:
free flow air filter (K&N, Piper, etc)
better inlet manifold
LCB exhaust manifold
free-flow exhaust system
uprated needle to cope with other changes
End result can be about 12% more torque and 20% more
power. Definitely the best small-tune you can do, and the best value-for-money
tuning upgrade.
Stage2:
Stage 1
modified head, usually I think enlarged ports/chambers
Stage3:
Stage 2
modified head with larger inlet OR exhaust valves
Stage4:
Stage 3
modified head with larger inlet AND exhaust valves
Stage5:
Stage 4
Extra, special head mods. Slanted guides, etc.
There is of course a lot of play with various cams
independently of the "stage" upgrades.