I went with what you might call a "natural consequence time-out," and that's still the only kind of time-out we do with our four-year-old. There's an example in this article I wrote when my kid was 13 months old, which is short and might be generally useful to you, so I'll just paste the whole thing here:
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Toddler Discipline in Three Easy Steps!
I feel there are three basic steps to handling objectionable toddler behavior, two of which are optional depending on the situation:
1. The firm objection. Optional; use if behavior needs to stop immediately.
Example:
"OWWW!! Let go of my hair!!"
2. The redirection to a positive behavior.
Example:
"Touch gently."
3. The consequence. Optional; use if behavior is persistent or if consequence is unavoidable.
Example:
"When you pull my hair, I don't feel like holding you."
Another example: "Because you broke the jar, you'll have to stay in here alone while I go sweep up."
The other big thing I'm working on is checking my urge to say no. Often things I think are going to be problematic are not if I give Nicholas a chance to show me what he's actually going to do, which may be different from what I think he's going to do. For example, I kept stopping him from grabbing the phone cord near where it attaches to the wall because I was afraid he'd yank it and damage the flimsy plastic thing that holds it in. When I finally let him handle it without interference, I found that what he wanted to do was to hold the slightly slack cord about 6 inches from the outlet and shake it up and down in a joyful manner. That doesn't hurt anything. The yanking I'd seen him do before was all caused by my attempts to make him let go!
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To elaborate on that example: The reason we don't pull hair is because people don't like it. The way we learn that people don't like it is by seeing their reaction and discovering that if we keep it up nobody will want to be within reach of our sticky little fingers.
Now, of course I'm not saying that when my 1-year-old pulled my hair, I shut him in a room alone and left him there for hours! Nor am I saying I placed him in a specific corner and set a timer. What I did was set him on the floor and stand up. As he waved his arms and said, "UP!!" I repeated, in a sad but calm tone, "When you pull my hair, I don't feel like holding you." It was most effective at re-setting the situation when I went on to do something else (like, now that I'm standing up, I'm going to clear the table) rather than stand there waiting for the baby to make it better.
Either HE would go on to something else, or he'd persist in wanting to do what he'd been doing. If he persisted, there were two stages:
1. "I WANT TO DO IT!!
NO FAIR!!"
2. "Mama, let me try again.
I will be nice this time."
Even before he could say words like that, there was a clear transition from the angry shrieking and struggling to the sweet, slightly embarrassed fresh start. When this transition happens, it's time to end the time-out and give the kid a second chance at good behavior.
THAT kind of time-out, I think a toddler can link to the offense. "One minute per year of age," not so much.
For not touching things, sometimes it turned out to be okay to touch them and I needed to calm down, as mentioned above. Redirection is the #1 tool, as everyone's said. But toddlers do develop a sense of rules, and you might be surprised how much your daughter already knows. Over time, she is internalizing that redirecting and learning which objects or behaviors are undesirable. The things that aren't all that appealing to her, she'll quickly learn to leave alone. The more exciting things will be harder and take longer. But she IS learning to "control her impulses" and "understand consequences" and all that good stuff; she is capable of that right now, just at a lower level than she will be later. So don't think of self-control as something that's in her future; think of it as something she's learning a little bit every day, with your help.
As for babies not having the sense to stay away from DANGEROUS things specifically (as opposed to things you don't want them to mess up), different babies have different amounts of sense and interest in sneaking away vs. sticking to Mama like glue, and my kid is the sensible and nearby type...but I think it was helpful to assume he had a vested interest in staying safe and therefore to help him understand what was up. For example, we have a gas range, and when the oven's on, the outside becomes quite hot. I said, "Be careful of the stove because it's hot!" and I put my finger on it and quickly pulled back. My baby tried this. Forever after, he understood that the stove could be hot and treated it with caution. If he wanted to get near the stove, he'd reach from arm's length to tap it with a fingertip to make sure it wasn't too hot. Instead of teaching, "Stay away from the stove or you'll get in trouble," I taught, "This is how you test whether something is too hot."
: I have used time outs on my 14 month old but she acts more like a toddler than a baby. She seems to be aware of her actions, consequences, seems to understand things well, has advanced motor skills, etc.
