Secondly, decide what type of character you want to play, based on the DM's campaign world. If it is set in an urban human city, it is a little pointless playing a deep-gnome or a goblin, much less a barbarian/ranger type. After receiving a world description from the DM, think of the character races that would fit into the campaign world. They do not have to be completely compatible, but they should neither be banal or outrageous.
In the example above, the type of races that could be native to the city are Semphari locals, possibly Dwarves, a Shou descendant, or the good ol' fashioned wanderer (although this is a little overdone). Ones that would be unsuitable are Tuigan nomads (do not live in cities, and would probably be tried as spies or thieves if they did), westerners (how did they get there?), elves, goblinoids (except half-orcs), or other races amongst Semphar's enemies. Whilst this should never preclude races that are out of the ordinary, you have to make the character concept believable.
As an example, I will make up a character using the Semphar setting as I go. Looking at the information provided by the DM, I decide to play a human, as they are most common in the area.
After deciding on a race, think of what sort of pre-adventuring experiences the character may have had. In this step, social class is very important, as it will have a significant effect on the choice of character class. Back in the days of Unearthed Arcana, there were a plethora of tables to determine social class, which can be used for this step. (As a caveat for DMs, read the Dungeon Master's Guide concerning the problems with noble or abnormally wealthy characters). Each social class, which can be roughly defined as low, middle, and upper, has it's own sub-structure. Upper class for example, would cover everything from very wealthy merchants to minor nobility to kings. The DM is advised to have these classes (roughly) mapped out for his campaign as a tool for both character creation and for general gaming.
In Semphar, there are several distinct classes; the Nobility, the Bureaucracy and Clergy, the Mercantile and Artisan class, the Warrior class, and the low caste or untouchables. Each has it's own sub-structure which defines a social standing to all members. The Warrior caste for example, has several ranks, each within the city guards, the navy, the standing army. These are split into three main groups; the officers, the career soldiery, and the conscripts. Being a Lawful Neutral society, these social castes are strongly adhered to, and it is difficult to move up a class, but easy to go down.
In regards character creation, players should choose a social class which is compatible to the race that they have chosen. For example, Dwarves in Semphar are usually Artisans or Merchants, so a Dwarven character should belong to one of these castes. Humans, on the other hand, could be anything from a noble to an untouchable. The human character I had earlier chosen will be from the warrior caste, because I would like to play a fighter.
Next step is to decide what sort of upbringing the character has had, and social class will be the chief determinant of this. A character from the nobility will have learned different skills and have a different view of life than a character from a rural background or a character from the urban slums. As an example, it would be uncommon for a character from an impoverished background to be a magic user, because their would be a question as to where the money to fund such an education came from. Similarly, a character from a noble or wealthy background would not be likely to become a thief (although this is not impossible). Social class should also provide ideas as to motivation. Why would a wealthy character suddenly decide to abandon the comfort of his existence and go adventuring? Why would a farmer leave the land that has been in his family for countless generations to go and rob caravans? These are questions that need to be answered in this step.