Development means you've moved it off it's starting square for the first time. If you move a knight to c3 and 15 moves later see that you really need it on d2 now and play knight at c3 to b1 and then from b1 to d2 it's not called development anymore, you're just maneuvering it. You could call it maneuvering, or improving the knight.
I think I also saw the term "redevelopment" once to describe a series of maneuvers of the pieces to the new optimal squares which is fairly common in a closed position, so you could use this term too.
In the case of a useless piece becoming strong, as in the example you gave of the knight on the rim going to the middle, you'd just call that activating the knight, getting the knight active, bringing the knight into the game, etc.
If White plays 1.Nf3, White has developed a knight. This much is obvious.
But if White later moves this knight once again -- on move 6, perhaps -- can we say that the knight has been developed again? Would move 6 qualify as a "developing" move? Or is it not possible, by definition, to develop a piece twice?
As another example, let's say we're in the endgame. The same knight is on the rim, and useless. But White now moves this knight to the centre, making it a strong piece. Again, can we say here that White has developed the knight? Or does "development" apply only to the opening?
In other words, my question is as follows: Does the chess term "development" simply mean "moving a piece away from its starting position, in the opening of a chess game", or does it mean "moving a piece to a 'better' square (even if it's been moved before), in any phase of a chess game"?