Dev will run a gulp command. Gulp uses an NPM tool called BrowserSync to construct a wrapper around Ghost. This allows you to make changes to a file within the theme, and the Ghost website will update automatically.
Resetting Your Password
I've locked myself a few times while in development mode and one solution is to simply update your SQLLite file with a new password. I use this online Password Hashing Algorithm to help create something quick and easy.
Too Many Login Attempts Error
If you fail too many times while trying to log in, you will get locked out. Fixing it will require you to open config.development.json and modify these JSON configurations.
You do not need to modify all of these. I am including them so that everything is kept nicely together. The only two nodes you'll want to review are user_login and global_block.