The toddler realizes that he is a separate person with his own desires and abilities. He wants to do things for himself without help or hindrance from other people. The toddler's favourite word "No" is a declaration of independence and a bid for increased autonomy. It is a reflection of being made in the image of God ... with the ability to make choices.
This push for autonomy is enhanced by muscular maturation as toddlers try to use their developing muscles to walk, climb, hop and jump and to explore their environment. Potentially, toddlers can get into dangerous situations. Therefore, parents have to balance the opposing virtues of encouragement and restraint. If a toddler's efforts to do things on his own were frustrated by over-protective parents then he may not have many opportunities to develop autonomy. On the other hand, if a toddler was harshly criticized for "accidents" (e.g., wetting, soiling, spilling or breaking things) then he may develop doubt about his own abilities to tackle new challenges.
Parents should provide many opportunities for toddlers to make choices. When parents "child-proof" the home, they offer freedom and safety for the toddler to explore his environment, and foster the development of autonomy. The potential strength acquired on successful resolution at this stage is the determination to exercise free will in the face of failures, shame and doubt.
On a related issue, I have noticed that some parents and caregivers in an attempt to comfort a toddler after a fall say something like this, "Naughty floor made Boy-Boy fell down. Don't cry. I will beat the floor." What do you think the toddler will learn from the adult's response?
Does this method unconsciously teach the toddler not to take responsibility for his actions and to shift blame onto others? If a child is to become a decision maker, he must learn to take responsibility for his actions and face the consequences of mistakes and failures. He needs to try again and learn that making mistakes is alright.