Final answer:
Lanugo, the fine, non-pigmented hair covering a fetus, is replaced with terminal hair around the time of puberty due to hormonal changes.
Step-by-step explanation:
Short, fine, non-pigmented hair, known as lanugo, is typically replaced with terminal hair during puberty. This change is a part of the normal human developmental process, where hormonal changes cause different types of hair to grow in place of lanugo. During infancy, the lanugo is typically lost and replaced initially with vellus hair, which is similar to lanugo but slightly different. Puberty then triggers the growth of terminal hair, which is coarser, darker, and more pronounced, especially in areas such as the underarms and the pubic region.