The way I always saw it was that character development was the characters actually changing, while characterization was finding out more about the characters. Is this correct, or are they both supposed to mean the exact same thing?
I define "characterization" as how the writer describes/shows/"writes" the character in the work. They might be developing, they might not; characterization is just how they're described as a character. So yes, perhaps in a sense this is "finding out more" about the characters, through how the writer characterizes them. Character development is as you defined it, how the character develops. I'd say that characterization encompasses/includes character development, but character development doesn't always have to be present (if it's a static character, for example). But there will always be some form of characterization present. That's just my definition though. *shrug*
I consider characterization to be how you convey the current state of a character in words. I use the term character development in two distinct contexts. The first is the aforementioned growth or decay of a character in response to the progression of plot. The other is the evolving definition of a character to prepare him or her for injection intoi the story. That is, in the second case, you develop a character ro fulfil a role in the story.
Characterization is the sum of Character A's actions and interactions within the framework of the story, as well as in the "backstory". Unless you want to get nit-picky, there's not much difference between character development and characterization. Character development implies (at least I think,) the way a character progresses in a story while characterization is CD in action.
I was taught that characterization was the creation of all a person's qualities and peculiarities...like a list of attributes and weaknesses that define the person. Character development relates to the story's use of those attributes as the person reacts to the storyline. The reason they seem similar is that the characterization often takes place at the same time as character development. For example, we might first learn about a person's internal anger (characterization) at the same time as we see her hostility be directed at some innocent victim (character development) in the story's plot. Characterization is kind of like describing a race car. Character development is more like taking it for a drive!