These two ideas of progress and self-development, or the realization and development of each person's capacities, also lie behind the arguments in chapter 3. Otherwise, the points about progress are mostly in the second half of the chapter 73-7, or his comparison with the East, esp. The idea is that encouraging human beings to do what they want, allowing them to be free from the tyranny of custom, will encourage innovation. This may sometimes take the obviously beneficial form of new discoveries or inventions or creations. Mill discusses geniuses in a rather romantic way on pp.74-6.
Freedom encourages diversity which is essential for originality and progress.
The overall point here is that liberty and diversity are beneficial to society as a whole because they foster progress. The second and more interesting point concerns development. Mill obviously thinks that among the 'higher pleasures' that he discussed in chap.2 of Utilitarianism there are the pleasures of developing one's capacities. He believes that development includes 'individuality'. This is the main theme on pp.66-73.