Since your dwarves have a limited lifespan, most of the development is in equipment, while your individual dwarves develop their skills during their lifetime, passing on only a small portion to their offspring. Digging bigger caves also helps you to place the many workshops, rooms and equipment that you will gather.
Your dwarves usually act in automatic planning mode, which means they will figure out themselves how to get stuff done. This means you can both set goals (like "dig here" or "make food") or you can order individual dwarves around. Your dwarves will get upset if they work too long and don't get enough fun out of their free time, so you will have to provide them with sane working hours and entertainment in their free time.
This article uses material from the Wikipedia article Diggles: The Myth of Fenris, https://en.wikipedia.org/wiki/Diggles:_The_Myth_of_Fenris, which is released under the Creative Commons Attribution-Share-Alike License 3.0, https://creativecommons.org/licenses/by-sa/3.0/.