Psychosexual development refers to the development of personality through stages centered around sexual pleasure and gratification or failure thereof. There are five stages - oral, anal, phallic, latency, and genital - each focusing on different erogenous zones and shaping personality. Fixation at a stage can result in personality disorders. The phallic stage involves developing the Oedipus or Electra complexes, shaping future relationships. The latency stage involves delayed gratification through socially acceptable activities before the genital stage focuses on relationships and seeking love.