Cottages only develop if worked by a citizen. Difficulty plays no role at all or anything else for that matter. Well, except the Emancipation Civic, which speeds development.
If you mouse over the cottage improvement, it will tell you in the info corner 1) the status of the cottage (cottage/hamlet/village/town) and 2) the amount of turns it will take to turn into the next level. It will also say "must be worked to grow" if there is not currently a citizen "working" in it. Obviously you can assign citizens in the city screen.
Just a slight correction, it will only say must be worked to grow if it's a cottage which hasn't been worked at all yet. If you have say a hamlet which needs 9 turns to grow into a village, the mouseover will always say it needs 9 more turns, regardless of wether it's currently being worked or not.
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