How do you avoid caching during development?

Add the filemtime() of your stylesheet as version parameter. Lets say, your default stylesheet is in css/default.css and css/default.min.css (not style.css). When we register a stylesheet on wp_loaded (not init), we can pass a version as fourth parameter. That will be the last modified time and therefore change every time we change the file.

$min    = WP_DEBUG ? '': '.min';
$file   = "/css/default$min.css";
$url    = get_template_directory_uri() . $file;
$path   = get_template_directory() . $file;
$handle = get_stylesheet() . '-default';

// Overridden?
if ( is_child_theme() && is_readable( get_stylesheet_directory() . $file ) )
{
    $url  = get_stylesheet_directory_uri() . $file;
    $path = get_stylesheet_directory()     . $file;
}

$modified = filemtime( $path );

add_action( 'wp_loaded', function() use ( $handle, $url, $modified ) {
    wp_register_style( $handle, $url, [], $modified );
});

add_action( 'wp_enqueue_scripts', function() use ( $handle ) {
    wp_enqueue_style( $handle );
});

If you are using Node.js and Grunt, I strongly recommend Browsersync. It will watch your files and update them instantly whenever they change. It can also synchronize the scrolling position, form submissions and more across multiple open browsers. Very cool.