sich entfalten
to develop
To fully develop one's abilities, talents, or personality; to blossom.
Im neuen Job konnte sie sich endlich richtig entfalten.
In her new job, she was finally able to really develop.

to unfold / develop
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to develop
To fully develop one's abilities, talents, or personality; to blossom.
Im neuen Job konnte sie sich endlich richtig entfalten.
In her new job, she was finally able to really develop.

The verb is made up of the prefix 'ent-' and the verb 'falten' (to fold). The literal meaning is 'to take out of a folded state'. All figurative meanings derive from this idea of opening or developing.
Vorsichtig entfaltete er den alten Brief.
He carefully unfolded the old letter.
'Entfalten' (to unfold/develop) is an inseparable verb. The prefix 'ent-' remains firmly attached to the verb in all tenses and sentence constructions and is never placed at the end of the sentence.
Sie entfaltet gerade ihr volles Potenzial.
She is currently unfolding her full potential.
Pay attention to the difference: 'Sich entfalten' (to develop oneself/to unfold) means that something or someone develops on its own. 'Etwas entfalten' (to unfold/develop something), with an accusative object, means that someone actively opens something or begins an activity.
Hier können sich Kinder frei entfalten.
Here, children can develop freely.
When a person 'sich entfaltet' (develops), it often refers to their abilities. Typical combinations are 'sein Potenzial entfalten' (to develop one's potential), 'seine Talente entfalten' (to develop one's talents), or 'seine Persönlichkeit entfalten' (to develop one's personality).
In diesem kreativen Umfeld konnte er seine Talente voll entfalten.
In this creative environment, he was able to fully develop his talents.
When the subject of 'sich entfalten' (to unfold/develop) is an abstract thing (e.g., effect, aroma, atmosphere), it means 'to develop' or 'to come into its own'.
Das volle Aroma des Weins entfaltet sich erst nach dem Dekantieren.
The full aroma of the wine only unfolds after decanting.
to seem / take effect
'wirken' and 'sich entfalten' can both describe something having an effect. 'wirken' directly says that something has an effect on someone or something. 'sich entfalten' puts more emphasis on this effect, atmosphere, or idea gradually developing and becoming visible or noticeable. The words can be confused because, for example, you can talk about a 'Wirkung' (effect). If you simply mean the effect, use 'wirken'. If you mean the process of something coming into its own more and more, 'sich entfalten' fits better.

Im warmen Raum entfaltet sich der Duft des Tees besonders gut.
In the warm room, the aroma of the tea unfolds especially well.
Das neue Medikament wirkt schon nach wenigen Minuten.
The new medication takes effect after just a few minutes.