A character arc is simply the meaningful and permanent change a character undergoes through a story. Not all characters have or need an arc but typically the protagonists ought to because there's only so much you can do with a character who never changes their...well character.
That said I feel it important to define character so this change makes sense and is meaningful.
There is a difference between Character and Characterization.
Characterization is all those external and psychological qualities of an individual. Anything that you can describe about a person is their characterization.
Character is the decisions a person makes when under meaningful pressure.
Meaningful pressure happens when you present the character with a proper dilemma. That is not a decision between what the individual perceives as right and wrong because who among us wants to make a consciously wrong choice (and if we do don't we try to justify it into a right decision in our minds). So a choice between right and wrong is no choice at all.
Rather you want to build the structure of the story such that the character has to choose between two incomparably GOOD things and choosing one means forfeiting the other. OR they have to choose between two BAD things and make a decision of what they consider the lesser of two evils.
It's in the choice that make under the pressure of a dilemma that shows their Character.
(Consider the phrase " oh they have good character." what does that mean?)
So to create a character arc that doesn't feel forced, you must present to the character one dilemma after another and make them choose. Their choices will reveal their character to you. Then you present another dilemma perhaps caused by their past action and the sum of all that has them making another choice.
You follow this during the first draft and you may find the character making different choices and this their inner Character has begun to change. That change is the character arc. By the time you reach the climax you may see they are a different character than they were at the start because the choice they make NOW is not the choice they would have made at the start of the story.
Hope this helps.
I've been making a number of threads on Storycraft and I think the next one will be on this very subject but it will have the benefit of my notes. Lol I just woke up.
If you'd like to see the first of them : https://forums.tapas.io/t/the-art-of-story-what-makes-a-story/25486 it's got links to the other two~