For me it's about the characters I play developing, which of course requires change in the world around them. That changes takes many different paths. I think about my own experience with the AFA when I think about this question. When I started playing the FA, I was basically the only player who played it, and basically the only player who had ever played it on the server. It was an open frontier, I was able to shape the NPC factions rp, as I shaped Ze'ev Barak's personal rp, and the rp of the AFA. This was long ago, and today, there arent really any factions that you can jump into and really define the identity of the faction, there are people who play almost every faction, and there is significant amounts of lore and player driven rp that is going on that has to be taken into consideration. I think more current examples of progression are the developments between the Order and the Corsairs, the Bretonian relationship with the Outcasts, and the developments between Kusari and Liberty.
I think a good way to judge development is whether other players jump on board with it. Developments like that can come from small groups or individuals, or from large factions or groups of factions.