Move overcrowded seedlings to larger containers once they have two sets of true leaves.
The first leaves that appear are rather indistinct and are called seed leaves. The next set of leaves look more like the mature plant’s leaves and are called true leaves. Once the next set of true leaves forms, it is time to transplant overcrowded seedlings.
Use a fork or spoon to carefully lift out the seedling. Clusters of seedlings can be dug and carefully teased apart before planting into individual pots. Be careful not to pinch or damage the young tender stems.
Place seedlings in their own clean container filled with moist sterile potting mix. Plant the young plants at the same depth they were growing in the original container.
Continue to grow them in a sunny window or under artificial lights and water thoroughly and often enough to keep the soil slightly moist.
A bit more information: Thin seedlings started in individual containers as needed. If you planted several seeds in each small container, remove all but the healthiest one. Prune the weaker seedlings to ground level, so the remaining seedling can develop into a strong transplant for the garden.