The Second Edition of the Oxford English Dictionary contains full entries for 171,476 words in current use, and 47,156 obsolete words. To this may be added around 9,500 derivative words included as subentries. Over half of these words are nouns, about a quarter adjectives, and about a seventh verbs; the rest is made up of interjections, conjunctions, prepositions, suffixes, etc.
That's a lot, and the OED agrees with the popular view that the large number is due to the promiscuous history of the formation of English, which involved England being conquered by so many different invaders, and America amalgamating so many different immigrant groups.
As for the exact number of words, that's impossible to say:
What about medical and scientific terms? Latin words used in law, French words used in cooking, German words used in academic writing, Japanese words used in martial arts? Do you count Scots dialect? Youth slang? Computing jargon?Jesse Sheidlower in Slate recently complained about the slimy media manipulators who call themselves "Global Language Monitor", who slapped together a list of English words that just happened to stop 1% short of a million. Their website, of course, displays a counter, which increases every time the company takes another step towards the millionth word and tons of free press.
Sheidlower calls assembling a comprehensive count of English words a fool's errand:
If our requirements for including words in the count are liberal, the OED futher points out, we cannot justify ignoring "'agglutinative' languages such as Finnish, in which words can be stuck together in long strings of indefinite length, and which therefore have an almost infinite number of 'words'."
What about Frizzie, "student of Ms. Frizzle" or busigator, "the Magic School Bus transformed into an alligator," in the books I'm reading to my daughter? What about Giant, "a player on the N.Y. Giants football team"? The most comprehensive abbreviations-dictionaries include about 500,000 entries, most of which wouldn't be found in standard dictionaries. The American Chemical Society has a registry of over 84 million named chemical substances, and there are about a million named species of insects alone; surely these must count as words?
What about obvious forms? Dictionaries include great-grandfather but not great-great-great-great-great-great-grandfather, which is real enough to get over 3,500 Google hits. Only the most basic numbers are typically included; Merriam-Webster, for example, includes twenty-one and twenty-two, but not twenty-three or thirty-one. In fact, if you were to count every number between 0 and 999,999 as a word, you'd have a cool million right there—and still have the rest of the English language to account for.