The document discusses iterative development, which breaks down software development into smaller chunks called iterations. Each iteration involves designing, developing, and testing a set of features until the full application is complete. The iterative development process follows phases of inception, elaboration, construction, and transition. It contrasts with waterfall development by allowing backtracking and delivering business value incrementally in each iteration rather than all at once at the end of the project. The document provides guidelines for implementing iterative development, such as ensuring modifications are easy to make and analyzing the implementation frequently.