Developmental psychology/Chapter 6/Emotional Development

Emotional Regulation, or effortful control (emphasizes temperament) - Control when/how emotions are expressed. By age 6, most children can control (and even describe) their emotions and not resort to temper tantrums. Parents teach emotional regulation and culture plays a massive role in this. This is a crucial part of executive function, which emphasizes cognition.
Self-concept - A person's understanding of themselves.

Initiative vs. Guilt

Initiative vs. Guilt - Erikson's 3rd developmental stage. Toddlers do something new, and they may be prideful or full of guilt. Their tendency to be more prideful over time is the result of their protective optimism (a crucial part of this process), where they believe they are smarter and possess greater physical ability compared to older adults' mindsets. Due to maturation, their cognition interprets everything as "categories", including significant (nationality) & insignificant, causing them to feel superior vs. other children. See the Zazas and the Flurps question.
All of these occurrences take place because of the cognitive growth of the child, increased myelination of the limbic system, prefrontal cortex growth and general neurological maturation (normally occurs at ages 4 & 5). This causes for emotional regulation and cognitive maturation to develop. See the famous marshmallow test.

What matters the most for children during this time?

Intrinsic Motivation - An internal reason to do something/reach a goal (advance creativity, innovation, and overall well-being).
Extrinsic Motivation - An external reason to do something/reach a goal.

An international study of 3-8 yrs old found that 1/5 children say that they have imaginary friends

...say that they have an imaginary friend. Does culture play a role? Do their cultures advise against imaginary friends?