The Concept of Death

At what age does a child become aware of the concept of death?
Last night we were watching a movie where one of the characters dies at the end...and not in a gory way, either. Emily was all concern about "'Erella" (the pretty heroine who ends up dying). Eric told her that she was hurt, not wanting to explain anything more as Emily IS only two years old and doesn't need to understand that concept yet.
We were wrong because she already does. She informed US that "Erella" died. Eric looked at me and I looked at him. Neither of us has any memory of teaching her this word or concept, yet she already understands it and we couldn't lessen the fact that this character did in fact die and wasn't "just hurt." For some reason, knowing our toddler understands this concept in some way made us both sad. Somehow, there is a little less innocence in our daughter because of this. She's growing up, and we realize she is supposed to, but does she have to grow up that fast?