There is increasing recognition that schizophrenia is a neurodevelopmental disorder that involves alterations in brain circuits.[Insel, 2010]

Normal cortical development involves proliferation, migration of cells, dendritic arborisation (circuit formation), and myelination, with the first two processes occurring mostly during prenatal life and the latter two continuing through the first two post-natal decades.[Insel, 2010] A progressive reduction of grey-matter volume with age is observed with longitudinal neuroimaging.[Insel, 2010; Paus, Keshavan & Giedd, 2008] The combined effects of pruning of the neuronal arbor and myelin deposition are thought to account for this.[Insel, 2010] Local changes are far more complex.[Insel, 2010] Data from human and nonhuman primate brains indicate increasing inhibitory synaptic strength and decreasing excitatory synaptic strength in the prefrontal cortex throughout adolescence and early adulthood – the period of prodrome and emergence of psychosis.[Insel, 2010]

Psychosis nearly always emerges in late adolescence or early adulthood, with a peak between the ages of 18 and 25, when the prefrontal cortex is still developing.[Insel, 2010] The neurodevelopmental trajectory in children developing schizophrenia could include reduced elaboration of inhibitory pathways, and excessive pruning of excitatory pathways, leading to altered excitatory-inhibitory balance in the prefrontal cortex.[Insel, 2010] Reduced myelination would alter connectivity.[Insel, 2010] Although data support these possible neurodevelopmental mechanisms for schizophrenia, none has been proven to cause the syndrome.[Insel, 2010]

References:
Insel TR. Rethinking schizophrenia. Nature 2010; 468 (7321): 187–193.

Paus T, Keshavan M, Giedd JN. Why do many psychiatric disorders emerge during adolescence? Nat Rev Neurosci 2008; 9 (12): 947–957.