Learn Russian: По словам чиновников, новая реформа быстро развивается. - According to the officials, the new reform is developing quickly.

По словам translates literally to "by the words". It is a standard reporting phrase used to attribute information to a specific source. You must follow it with the Genitive case to indicate whose words they are, which is why we see the Genitive plural чиновников (of the officials) here.

Is the comma after чиновников strictly necessary?

Yes, it is mandatory. In Russian punctuation rules, introductory phrases that indicate the source of a statement or opinion, like По словам чиновников, must always be set off from the main clause by a comma.

Does the word чиновников have a negative connotation in Russian?

It often does. The dictionary meaning of чиновник is simply a civil servant or government official. However, in modern Russian media and daily conversation, it frequently carries the same negative, red-tape associations as the English word "bureaucrat".

Why does the verb развивается have the reflexive -ся ending in this sentence?

The verb is reflexive because the action is happening to the subject itself. The active verb развивать means to develop something else (like a business or a project). Since the new reform is developing on its own, or undergoing development without a stated outside actor doing it to it, we use the reflexive развиваться.