Let's talk about Buzz Lightyear.
For some reason, every single toy until Buzz was "born" with this awareness of what they are and what their place in the world is. The toys seem positively BAFFLED that Buzz is so deluded as to think he's the ACTUAL Buzz Lightyear. And even more strangely, Buzz - even in his deluded state - knows to go limp when humans are around. What does this mean? That he has no awareness that he's a toy, but some built-in knowledge that he must become inanimate around people? The answer is probably something that's a bit of a stretch - Buzz is the latest 'n greatest, a brand new toy that features the latest in toy technology. There's some kind of computer chip inside of him that overrides his "toy self-awareness" personality, but leaves in reflexes as to how he needs to behave. This theory is bolstered by the events of Toy Story 3, when the language is switched and his ENTIRE PERSONALITY CHANGES. The toy companies have programmed Buzz's personality - the first time they've ever done so with a toy.
The toy companies are experimenting with their Buzz Lightyear line of toys - for what purpose, though, remains to be seen. Most likely, they are working on toys that can play with kids ON THEIR OWN. With modern distractions like the internet and videogames, the toy companies in the Toy Story universe are getting nervous that their products will become obsolete - so they're rolling out something new and exciting, something kids have never seen before - a toy that can play back.
No longer will toys simply be a kid doing their voices and smashing them around while they remain inanimate and stupefied. The toys will have the personas the kids imagined for them - but it's still in the experimental phase. This is something new for the toy companies, and they don't know what the results will be, so they have not overridden Buzz's reflex to become inanimate around humans.
Eventually, though, they will. A living toy that embodies the personality it was based off of - that is the next step in toy technology.
The toys in Toy Story are all trapped in a state of arrested development - whatever "age" and level of intelligence they are created at, they are trapped for life. Big Baby in Toy Story 3 has been around for years and years and years - yet still has the communication skills and emotional maturity of a baby, while Buzz Lightyear, fresh out the box, is clearly an adult. They have pre-determined states, which they cannot grow or change, no matter what they do or how long they exist. Woody has been around since the 50s, while Buzz is essentially a an infant - yet they're on the same level in terms of maturity.
Even though they are trapped in a specific stage of life for however long a toy can be alive for, their minds are not immune to the kind of deterioration human minds experience. Woody has been around since the 50s, but has no recollection of his origins, where he came from, or how he was originally brought into this world.