Referrence:

Development of the Female Sexual & Reproductive Organs http://www.the-clitoris.com/

What came first, the chicken or the egg? While we do not know the answer to this question, we do know all humans start out being physically female, even though genetically they may be male. For the first eight weeks of our existence, both male and female fetuses have the same rudimentary reproductive and sexual organs. In the early stages of fetal development the maternal hormones control the development of the reproductive organs as the fetus is incapable of producing its own. It is not until the twelfth week of development that you can start to visually determine the sex of a fetus. The image below demonstrates how even after more than twelve weeks, they still look very similar.

It is for this reason that male and female reproductive and sexual organs are more alike than they first appear. The clitoris is actually a penis that is not fully developed, or another way of looking at it, a penis is a fully developed clitoris. As with a penis, the clitoral glans and shaft become engorged with blood during sexual arousal resulting in an erection. When the clitoris becomes well developed it looks exactly like a small penis, minus a urethra. In addition the glans and corona may be well defined and the entire clitoris may project outward from the body. A woman can have a large clitoris at birth, or acquire one as the result of taking prescription and non-prescription steroids.

The first image shown below details the stages of development for the female external genitals. The image below that shows both the development and similarities between the male and female external genitals.