Bronfenbrenner's ecological theory states that children's development is influenced by their relationships and environments across different systems, from close personal interactions to broader cultural influences. The theory identifies microsystems like family, mesosystems of connections between microsystems, exosystems of external influences, macrosystems of culture, and chronosystems of time. Erikson's stages of psychosocial development also reflects how children develop through stages of trust, autonomy, initiative, industry, identity and more based on resolving crises at each stage. The document discusses how parenting styles, peer relationships, school, self-esteem, morality and coping with stress all impact child development according to various psychological theories covered in Unit 3.