Rails setting so that no need to bounce the server on code changes ?

Isn't there a rails setting where if you make a change to a
controller or delete a file you don't have to restart server (using
webrick) ?

In the appropriate file in config/environments if you have
config.cache_classes = false
then files will be reloaded for each request. This is normally set
false in development.rb so that you do not need to keep restarting the
server, but is normally set true in production.rb in order to avoid
the overheads of reloading the files all the time.

Even with it false there are a few occasions when it is necessary to
restart, if you change routes.rb for example.