When starting a project, working as an individual developer provides a level of development freedom that can get quickly complicated when it is time to grow the team. Once you expand to multiple developers, it is critical to maintain a well-documented and structured development environment. In a poorly architected environment, team members will have different experiences and ideas about software development, which can lead to friction amongst developers. The lack of consistency between the different environments makes fixing bugs and developing features a frustrating experience, and leads to the commonly used "works on my machine" excuse. By contrast, a properly structured and documented development environment keeps everyone on the same page and focused on product instead of constantly trying to get things to work. In addition to a more efficient development team, a structured development environment can drastically decrease the time it takes to onboard a new developer (I've personally worked at a company where the development environment took the entirety of my first week to setup and configure properly, because it wasn't properly documented or managed).
While there is no "one size fits all" development environment, the majority of the solutions to the problem are centered around consistency. This is almost always handled through the use of virtual machines, however, how and where they are setup can differ wildly. When it comes down to it, there are two options that determine what and how these machines work: local or remote. In a local development environment, devs run an instance of the code locally on their own machines, which allows them to work independently and without having to rely on a centralized server. Unfortunately, local environments can be limited when trying to replicate more complex production environments, especially if developers are working on underpowered machines. In a remote environment, developers work directly off of a remotely hosted server, rather than locally. This has the added benefit of offering perfect parity with the production environment, but requires developers to have a high-speed internet connection to write and test even the most trivial of changes to the codebase.
The most popular structured local development environment that I have seen is Vagrant. Vagrant, at its core, is a cross-platform virtual machine management tool that allows you to configure and provision virtual machines in a reproducible way. With built in Puppet and Chef support, Vagrant is an excellent way to setup a brand new development environment with just one command. What makes Vagrant so great is that, rather than passing around machine images, the configuration files are committed directly into a project's version control system and a base machine is built and configured on the fly, meaning any developer who can clone the codebase is also instantly given the ability to spin up a virtual machine. Because Vagrant runs within a virtual machine that mounts the directory it is configured in, developers can also use any IDE that they are comfortable with, which allows them to spend less time learning new tools and more time focusing on product.
Often, it is desirable for developers to work off of a centralized server (or set of servers), rather than their local machines. Remote development environments are an interesting case in that they can provide a lot more power than local environments and reduce the amount of setup required to almost nothing for new developers. Depending on the size of the organization, these environments can be set up by someone on either the development or operations team, and can be hosted almost anywhere. The two most common setups I have seen for remote development environments are shared servers and private servers. In a shared server environment, every developer shares the same machine with their own distinct logins and subdomains. This is a good solution for organizations with limited resources that self-host their servers, as it may not be feasible to have a dedicated private server for each developer.
When available, private servers are the perfect solution for remote development environments because they can provide 100% parity with production environments and, much like Vagrant, can be spun up at the click of a button. The biggest problem with private servers, however, is that an internet connection is required to use them. In a local environment, developers could theoretically work off the grid, but in a remote environment, a high-speed internet connection is always required to get work done. Another, smaller issue is remote access doesn't always play well with every IDE. Many don't provide great remote access functionality, if they provide any at all, requiring developers to either use a new IDE or cook up hacky solutions to use the IDE they're used to using.
In a perfect world in which developers have access to sufficiently powerful machines, I would recommend Vagrant 100% of the time. Because it is cross-platform, organizations can take an OS-agnostic approach to personal computers, and the automated and simple setup allows for quicker developer onboarding. While Vagrant can have some speed drawbacks, the lack of internet requirement is a huge bonus, removing "my internet is down" from the list of things that can go wrong in a project.