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This review of literature introduces Erikson’s psychosocial theory in relation to identity development and fidelity. It explores the intrapersonal and interpersonal determinants of fidelity and identity development as described by Erikson, with a specific focus on the role of schools and the challenges faced by students with gifts and talents (SWGT). It explores the unique challenges faced by SWGT in their identity development journey, such as boredom, underachievement, and social isolation. The social aspects of identity construction and the influence of educational institutions on students’ identity development have been highlighted. It emphasizes the significance of creating a supportive learning environment that fosters students’ psychosocial needs, including positive peer relationships, mentorship, and academic challenge. The paper also explores some of the intrapersonal determinants of fidelity and identity development, such as hope, willpower, purpose, and curiosity. These factors have been found to be essential in guiding individuals towards Eriksonian fidelity and play a crucial role in their pursuit of goals and success. The interplay between the interpersonal and the intrapersonal factors is discussed, emphasizing their dynamic nature and their impact on an individual’s sense of agency and pathways. Finally, based on the reviewed literature a conceptual framework has been proposed to understand the holistic development and application in educational settings.