Most traits expressed by organisms, such as gene expression profiles, developmental trajectories, behavioural sequences and reaction norms are function-valued traits (colloquially "phenotypically plastic traits"), since they vary across an individual's age and in response to various internal and/or external factors (state variables). Furthermore, most organisms live in populations subject to limited genetic mixing and are thus likely to interact with their relatives. We here formalise selection on genetically determined function-valued traits of individuals interacting in a group-structured population, by deriving the marginal version of Hamilton's rule for function-valued traits. This rule simultaneously gives a condition for the invasion of an initially rare mutant function-valued trait and its ultimate fixation in the population (invasion thus implies substitution). Hamilton's rule thus underlies the gradual evolution of function-valued traits and gives rise to necessary first-order conditions for their uninvadability (evolutionary stability). We develop a novel analysis using optimal control theory and differential game theory, to simultaneously characterise and compare the first-order conditions of (i) open-loop traits - functions of time (or age) only, and (ii) closed-loop (state-feedback) traits - functions of both time and state variables. We show that closed-loop traits can be represented as the simpler open-loop traits when individuals do no interact or when they interact with clonal relatives. Our analysis delineates the role of state-dependence and interdependence between individuals for trait evolution, which has implications to both life-history theory and social evolution.