Typically we think of character development in terms of a growth in some area, but that isn't the case for the narrator in "The Yellow Wallpaper." Instead, the narrator in this short story experiences a steady decline in mental faculties as the plot progresses.
When the story begins, the narrator, who likely suffers from some form of postpartum depression, understands that she is sick and even tries to convey what she believes will cure her. She longs for nature, for the company of other people, and for the ability to write. Yet she is initially frustrated that her husband dismisses her: "You see he does not believe I am sick!"
As the plot continues, the narrator's frustrations at being kept in a form of solitary confinement grow. She begins to associate her growing feelings of resentment with the physical features of her room. The room, a former nursery, as been ravaged by previous children. The wallpaper is torn in spots. The floor is "scratched and gouged and splintered, the plaster itself is dug out here and there."
Kept separate from nearly everyone, the narrator begins to focus her angst first on the pattern of the wallpaper, which she describes as "irritating." And then, she notices something else:
But in the places where it isn't faded and where the sun is just so—I can see a strange, provoking, formless sort of figure, that seems to skulk about behind that silly and conspicuous front design.
This "figure" evolves into a woman whom the narrator believes is trapped behind the pattern of the wallpaper. As time passes, the narrator "watches" this woman more and more until the woman "trapped" in the wallpaper becomes the singular focus of the narrator's concerns. She detaches from her husband and eventually begins to feel that she is "getting angry enough to do something desperate." At this point, she also notes that she doesn't "like to look out of the windows even—there are so many of those creeping women, and they creep so fast." Clearly this is a departure from her initial character that longed for the peace outside her windows. The narrator then wonders,
I wonder if they all come out of that wall-paper as I did?
The narrator now sees herself as the woman who is trapped behind the patterns of the wallpaper, trapped in a life she doesn't control and cannot escape, and wonder if all women feel this same sense of repression. This sense of powerlessness drives her into further madness until she attempts to take control of her own life by pulling off the wallpaper, which symbolizes her entrapment, and tells her husband that now he "can't put [her] back."
In the end, the narrator frees herself of the physical and marital constraints imposed upon her by a society which doesn't understand her needs.