Story development has two meanings here. They are closely related. It just depends who is in the driver’s seat: the audience or the creators of the story.
The first meaning relates to watching the story develop or unfold. We’ve all been watching movies, TV, reading books for a long very time. We have come to expect certain things in a story.
We are curious about how the story develops. If the story unfolds in an intriguing way, we stick around to find out what happens next. If we don’t like the way the story is developing, we move on to find another one.
The second meaning relates to the work that goes on behind the scenes by the people who are developing the story. In this way, story development focuses on thinking about all the important elements that need to go into making a story people will want to stick around for.