If you've ever had the opportunity to watch an infant grow into adulthood, you know how amazing the transformation is. And if you're that child's parent, you are probably even more awestruck and humbled by the experience.
For writers, the characters they create are akin to virtual "offspring". After all, the authors have given life to them and created situations whereby those characters can grow and change. The resulting metamorphoses and epiphanies make up the basis for strong character development.
But your characters can not "grow up" within a vacuum; they need your assistance. Like a parent, you have to be willing to allow your characters to take chances by putting them into a variety of situations. Otherwise, the characters can not hope to evolve into full fleshed-out persons. This process could best be described as character evolution