People on Usenet always seem to be impressed when someone says they got a game up and running over a weekend. A relatively short time to get something up and running isn't terribly unusual. There are several stages in the development of a game. At the risk of being too simplistic, these stages are called milestones and we usually get part of our total pay when we reach each milestone. There are variations, but the most common milestones are signing, first playable, alpha, sometimes first net playable, beta and final.
Signing is when the contract is agreed upon and signed by both parties.
Usually at this point you can see players moving around, the bare bones of interface etc. Alpha has more features and is cleaner, but may still have many bugs. At this point most of what is left is major cleanup. First net playable is obviously only for network games and usually means that at least one network protocol is working. Beta means that all the features are there and we are at the point of squashing bugs.