This HERE is an excellent post by Kristen Lamb on the relationship between plot and character in driving a story. It also deals with the necessity of the Wound in character development, laying it out as the thing which warps or determines the beliefs of the character and which, by forcing conflict, will cause the character to grow. Or at least make for an interesting story.
I agree with most of what she says about the Wound, but would modify it a bit and call it the Big Lie. It is a flaw or a warp in the character’s beliefs, caused possibly by something as minor as the culture the character was raised in, which comes into conflict with the events or environment of the story in some way so as to force the character to struggle, and through that struggle to grow. That said, the post is great and you should definitely check it out if you’re a writer.