To understand individual differences in development it is important to consider both inherited characteristics as well as environmental factors and their interplay. Individual differences are found in all psychological characteristics physical-mental abilities, knowledge, habit, personality and character traits. One of the most significant and chief causes of individual differences is heredity. Environment significantly influences individual differences. Changes in child’s environment are reflected in the changes in his personality. Psychologically speaking, a person’s environment consists of sum total of stimulation which he receives from conception until his death.