After undertaking a project of unusual secrecy, Data stuns the crew by revealing that he has created another android, Lal (Hallie Todd), which he introduces as his child. Lal is activated and interacts with Data and the crew in a series of lessons designed to aid in the development of her sentience, cognitive abilities, and social understanding. Picard is somewhat taken aback at the revelation of Data's child, having not been consulted about the creation of a new artificial life on board his ship. He's unsettled by what Starfleet might do when it finds out about Lal.
Picard's fears turn out to be founded. Starfleet wants Lal sent to a starbase for further study, arguing that Data does not have the required expertise to ensure Lal's proper development. Picard argues back and forth with Starfleet, and refuses to separate Data from his daughter, until Starfleet sends out Admiral Haftel (Nicholas Coster) to make a determination of Lal's situation and whether her development would be best served remaining on the Enterprise.
I've always found the much-adored "Offspring" to be a solid, intriguing, but somewhat overrated TNG episode. It isn't without its problems. For one, the whole notion of Lal choosing her species seems to me like an idea that is little ado about nothing. The scene where Lal narrows down her choices in the holodeck seems awkward and truncated, and it arises from a point I find confusing: If Data's mission has been to study and become more human, why would his daughter be anything else? It's not like Data has spent his life trying to understand the Klingon or Andorian condition. But that's a minor point. A more significant one is the fact that Starfleet's position regarding Lal's development (they intend to separate her from Data) feels like an excessively forced point of conflict. Haftel is written as far too arbitrarily obstinate. His stance against Picard acts as if "The Measure of a Man" never happened (events of which Picard explicitly mentions).
Still, "The Offspring" has its heart in the right place and represents an interesting (albeit brief) journey. The fact that the story is about Data's rights and experiences as a parent at least centers everything on human issues rather than technological ones. And there's some fascination in watching Data and Lal grappling with basic human questions of learning and love (although I found some of these individual scenes to be a bit too "cute" at times). The building friction between Picard and Haftel is not resolved (which is ultimately a bit unsatisfying), but instead rendered moot when Lal begins experiencing unanticipated emotions, malfunctions, and ultimately death (described by Data as "total system failure"). Data's inability to feel emotion over the death of his daughter is simultaneously a blessing and a tragedy, and yet he was still able to derive an unparalleled enrichment to his life through Lal's existence.
One thing is certain about season three: It saw TNG introduced to what would become much of the core staff of writer-producers on Trek for years to come: Michael Piller, Ira Steven Behr, Ronald D. Moore, and now Rene Echevarria. "The Offspring" is also Jonathan Frakes' directorial debut.