Quiet new to sitecore world and haven't come across any online API that looks like MSDN. Could anyone please advice if there is any such resource for sitecore development?
API documentation exists on the SDN site, for example Database.GetItem is documented http://sdn.sitecore.net/doc/api%205.0/Sitecore.Data.Database.GetItem.html
Admittedly it's the 5.0 API documentation, but kernel API methods don't change that often.
Try visiting the one of these official Sitecore sites: