My six week old's drawers contain
Mostly 3-6 months
A few 0-3 months
A couple of big 0-1 month (and all 0-1 tops)
A couple of tiny 6-9/6-12 months (mainly sleepsuits as he is long and sizing is ridiculous)
My just turned three year old is wearing
Mostly age 3-4
A few age 2-3
Age 4-5 or 5-6 pants
A couple of 18-24 months (but I have just retired a load of this size in autumn /winter clothing)
I tend to buy ahead. I get second hand bundles and top up with sales items or the occasional really cute thing I can't resist. I keep a big sturdy bag for each child with all the clothes that are too big for them (the youngest only a size or two up) sorted into type of clothing and sizes. Periodically I'll get out a pair of trousers or vest or whatever and try it on them, if it's still too big it stays in the bag. If it fits it goes in the drawer along with everything else of that type in that size.
When I notice that an item of clothing is too small I have a box in the wardrobe that I put it into. When the box gets full I sort through it and decide which to keep for the baby and which to get rid of. The baby's outgrown clothes go straight in the sell pile because he's the last one. I have a couple of big boxes that I'm storing the in between sizes in for the baby to grow into, but once he's in 18-24 months I expect there will only be a couple of sizes between them so I won't need that storage any more.
I tend to sell anything in good condition and chuck away (recycle) if it's worn out, stained or broken.
If they get into a size and are lacking some kind of clothing that is when I go to a shop and buy new and that's when I'd look at sizes other than to check my stash to see what I've got enough or not enough of.
I love buying, sorting and organising their clothes and this system works well for me. I find I get the most wear out of things this way. I've used UK names for sizes here but I live in Germany and children's clothes are sold in centimetre height sizes which make a lot more sense anyway!