Component-Driven Development term is starting to get used widely, esp. in connection with Inversion of Control.
Component-based development (CBD) is defined as a set of reuse-enabling technologies, tools and techniques that allow application development (AD) organizations to go through the entire AD process (i.e., analysis design, construction and assembly) or through any particular stage via the use of predefined component- ...
Component-Driven Development (CDD) is a development methodology that anchors the build process around components. It is a process that builds UIs from the “bottom up” by starting at the level of components and ending at the level of pages or screens.
CDD decomposes the frontend files into smaller and easily manageable components which are easy to handle, making any upgrade or modification become an easy task. Faster development: Component Driven Development reduces development time a lot, furthermore the relationship with the codebase.
Component based development is an approach to software development that focuses on the design and development of reusable components. You can break your monolith into components: Using a producer/consumer model.
What is it?
I think the definition in your answer covers this question well. Although, I question why the definition includes that a component needs to explicitly define its dependencies. A canonical example of a component is an ActiveX control - do they need to explicitly define their dependencies?
What problems does it solve?
Management of complexity. It seeks to address that by allowing you to only ever think about the implementation of the component. One should only need to author components, one should not to have to think about how to combine or manage them. That is done by some framework or infrastructure external to the component, and unimportant to the component author.
When is it appropriate and when not?
Not necessarily appropriate in a trival or throw-away application. The bad smell in a component architecture, is if you are spending time on thinking or working on the infrastructure to manage and combine components, rather than the components themselves.
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