Developmental editing is about resolving big-picture problems in your story.
It addresses content and organization.
CONTENT: How developed is your writing?
reworking content that is imbalanced, unfocused, or lacks proper research/development
identifying plot holes
Examples: inconsistencies in character description; nonsensical timeline; a seemingly unimportant event is overly described, while a crucial moment is glossed over; in non-fiction, the writing sidetracks into an irrelevant topic.
ORGANIZATION: How cultivated is your writing?
analyzing how the content is structured and whether the reader will be confused or dissatisfied with that organization
Examples: an element of the story/character is revealed too early/late in the book, and it negatively impacts reader enjoyment; in non-fiction, ideas are not properly separated or progress in a disorienting manner.