I don’t think the .223 was so much developed as it was born and adopted. From a magazine article I read the round was created at Bob Huttons Ranch by a bunch of guys who were looking to push a .22 bullet 3000 fps . They also had a distance criteria. They basically wild catted the .222 Remington. Stoner used it, and that’s how we got the thing in inventory. But it was only a wild cat, you can go to DTIC
http://www.dtic.mil/dtic/, type in “Report of the M16 Rifle Review Panel” and see all the various reports created as DoD reacted to all the dead Americans who died with a jammed M16 in their hands. What you see is a rifle and cartridge not ready for prime time. The Department of Defense found to their dismay that this “fully developed cartridge” did not have any of the normal standards defined: such as brass hardness, pressure curve, primer sensitivity, fouling due to primers and powders. Heck, the powder lots used in the early M16 were hand selected. It was beyond state of the art to make all powder lots within the rifle requirements, the contractor had to select the lots that worked. When that contractor told DoD to pound sand on more powder deliveries, that is when we got into the ball powder mess.
The cartridge was just a wild cat created by a couple of guys at Bob Hutton’s ranch in California.
This has an interesting time line of the adoption of the M16
http://www.thegunzone.com/556dw.html
Normal cartridge development would entail a number of factors, each of which has to be traded against each other. You could call it an analysis of trades.
Factors you would trade off: lethality, range, recoil, barrel life, cartridge weight, accuracy, function. Bullet weight and diameter would fall out of the trades.
You have to trade these things off, if lethality was your one and only goal you would end up with some monster that no one could shoot without a nose bleed. How issues are traded is very contentious, because everyone has a “pet rock”.
The 308 was more or less dictated. The Army wanted 30-06 performance in a smaller package. So they had already decided on range, recoil, barrel life, lethality. The only real issues for the 308 were size, accuracy, function.
I consider the7.62 X 39 cartridge a better example of a developed cartridge. I suspect the Russians wanted 30 caliber, but they sure traded size, velocity, weight, range, lethality, recoil, function, to get a really good intermediate combat round.
Something like the 243 would be tossed out early, when the design team finds that barrel life is 800 rounds.