As pointed by Brian in his comment your question is mainly about Target Configurations for the Android Target Platform. That being said:
I'm assuming that Development is if you want to publish without using
an Application Store
Your assumption is safe as of Delphi 11 as the Application Store Target Configuration always produces an .aab file specific for Google Play distribution for the Android 64 Target Platform. On older RAD Studio versions (e.g. 10.3.3) a standard .apk file signed with your production Keystore was generated even for Android 64 if you had .aab file generation turned off.
Does Development mean its still in Debug Mode?
No. Debug is a Build Configuration and it is not conditioned by the current Target Configuration, so you could theoretically have an "Application Store Debug" build but it is useless as Google Play rejects those. You can see the differences between Build Configurations here.
is it ok to do a release for Application Store but publish it on a
private URL
Unless your users are technical savvy enough to deal with an .aab file or your Delphi version allows you to turn off .aab file generation I would recommend distributing a Development (.apk) build over your private URL.