Essentially you write about 100 words to describe your character. From those you pick out skills, magic, profession, relationships and special items.
All these are given a predetermined value that can be raised from a pool of points.
You also have Keywords, which are things like your cultural background, profession and magic. So, Troll, Beetle Breeder and Initiate of Gorakikki would fit. Each keyword contains individual skills that fit the keyword, some will be listed but if something new comes up in play that would fit, just add it to the list.
It's a lot of fun generating PCs.
I haven't seen the new edition, but I gather that hasn't changed much.