From PinataIsland.info, the Viva Piñata wiki
All piñatas have life stages. Some piñatas, such as the sour variety, don't progress through all the stages, but most piñatas progress through all four. When a piñata reaches a new life stage you will earn an award, which gives you experience towards your next level.
|Appearance||Wild piñatas appear near your garden to check it out, but are careful to stay outside the garden border. They will appear monochromatic (black and white) to signify that they are just looking.|
|Visitation||Piñatas in this stage will enter the garden proper for a closer look, but are still wild. These piñata will also appear monochromatic.|
|Residency||A piñata that decides your garden is up to its standards will become a resident. These piñatas will burst into bright colors to signify their residency. At this point you can begin to directly interact with them. Up to two piñatas of the same species will attempt to become a resident at any given time.|
|Romantic||Two piñatas of the same species can be influenced to romance in order to produce a new piñata of the same species.|
Another interpretation of "life stage" is the maturation of the piñata . Pinatas begin as an egg, are hatched as a small version of that piñata , enter a cocoon where they grow to full size, and then eventually emerge from the cocoon as a full adult piñata .
This process of growing from egg to adult can be used by a clever gardner to get fun results. In general, "baby" piñatas do not become variants or romance, but in Trouble in Paradise you can poke the piñata as it is entering its cocoon and the baby becomes a permanently small miniature adult. You'll find that tapping certain eggs at certain times creates a surprise too. And, of course, one central challenge of both VP versions is learning a way to hatch eggs without just waiting for them to hatch on their own!