There wasn't much development. Most of the stories are short stories, and they rely upon the relationships established for the series - Holmes as the genius, Watson as the storyteller and the person to whom Holmes explains. And occasionally Lestrade as the failing regular police, to show why Holmes is needed in the setting.
Sir Arthur Conan Doyle did try to get rid of the character; having Holmes murdered by Moriarty, and by telling us that Holmes retired to become a beekeeper in "His Last Bow".
The preface to The Case Book of Sherlock Holmes is telling:
I fear that Mr. Sherlock Holmes may become like one of those popular tenors who, having outlived their time, are still tempted to make repeated farewell bows to their indulgent audiences. This must cease and he must go the way of all flesh, material or imaginary.
So, the main character became stuck in his role early on, to the point that the writer himself considered it monotonous. If Sir Arthur Conan Doyle could have broken this "monotony" by adding character development, he probably would have.