Step 1: Heat the salt.
Ammonium dichromate decomposes on heating: $(NH_4)_2Cr_2O_7\rightarrow Cr_2O_3+N_2+4H_2O$. This is the well known volcano reaction.
Step 2: Spot the oxide.
The chromium oxide formed is $Cr_2O_3$, chromium(III) oxide.
Step 3: Test it with acid.
It dissolves in acid: $Cr_2O_3+6HCl\rightarrow 2CrCl_3+3H_2O$. So it behaves like a base here.
Step 4: Test it with base.
It also dissolves in alkali: $Cr_2O_3+2NaOH\rightarrow 2NaCrO_2+H_2O$. So it behaves like an acid here.
Step 5: Decide the nature.
Since it reacts with both acids and bases, $Cr_2O_3$ is amphoteric.
Step 6: State the answer.
\[ \boxed{\text{amphoteric}} \]