I wrote this how-to a while ago as a blogpost. I think it has another angle then Robiponys - so maybe you want to check out his one too.

This is a quick guide to create OCs or to flesh out underdeveloped background characters.

Note: It is not meant to build self-inserts or something (although a good fleshed out self-insert OC may drag lesser negative reactions).
Because I want to show-off my fancy self-insert-pony I'll use Sandy Gears (the nice grey avatar-pony with the witch-hunter-hat) for examples.

Why?
I am into P&P-RPG and LARP since over 17 years now (gosh - getting old...). I've played a bunch of characters (some really shitty, some pretty well) I've played NPC in LARPs and I game-mastered more RPG-groups I can remember (O.K., I am bragging a bit)
So creating NPC on the fly is something I am good at. (You can't imagine how often your players use anything but your way to solve an adventure, and how many times you are forced to improvise castle-guards, inn-keepers or shady peddlers from scratch and in ten seconds flat).

This said, characters are the very backbone of every story too. You can describe scenes and obstacles as good as you want - if the characters you use are just implausible or unrealiable - your whole work is in vain. As you write your story without interruption from pesky players, it is not likely that it turns in a very strange direction (but even this happens - sometimes stories write themselves and just using you as their pen).

So here are is a bunch of questions you should ask yourself about what your character does, is good at, is bad at and why it is in your story anyway.

1. Why Do you need the Character?
Do your story need the character? This is the crucial point. You are writing a story and anything inside the story is just a tool to tell your tale as good as possible. Even your characters. You may rely on them you may even love them - but they are still just a part of something bigger.
Unless you are writing a nice wish-fulfillment-tale about having fun with your princess of choice, you should ask yourself: What role do this character fulfill?
Is it a main-character? Is it part of a team of main-characters? Is it a helper / side-character or a villain / henchman? Male or female. Why?
Do you need an extra character or may you reuse one you used before? (Lesser characters are often better - because of clarity-reasons)
Even if it used just one time - you never know if you want to reuse the character later.

Writing a story about Daring Do, Rainbow Dash and Derpy I was in need of some pilot-like character for the intro-scene (like the pilot with the snake-pet at the beginning of "Raiders of the Lost Ark"). As Sandy Gears is something like a ... hmm meta-self-insert (resembling my LARP-mad-scientist) I decided to use him. He works for Daring Do and is just planned for one appereance.

2. Name
The name is the most relatable thing about your character. Your reader will link anything what this character does to this name. So you should use an unique and fitting one. The show gives us some hints how they name their characters. Either with ponified real names like Bill Neighi or descriptive names like Pinkie Pie or Rainbow Dash. Sometimes even with funny puns.
Here you have a good oportunity to build some nice inside joke, or to fail entirely - so think about how you name your character. There are names wich are often equated with bad OCs. Anything containing Dark or Evil, or Hell or such things. Unless the story need such names - avoid it.

Sandy Gears: A play on the phrase "to throw sand in the gears", describing the chaotic behaviour and his often prone-to-fail-inventions. I tinkered a while, "Wrenchy Gears" would be the better pun - but the conotation of the word wrench was just a bit off for my taste...

3. The silly hat
This is a LARP-experience, but it works partly for writing too. For example - why do I use a silly-hatted grey pony as avatar? For the same reason Trixie has her hat and cape, Octavia her cello and Vinyl her pink shades and Derpy her wall-eyes. It is a trademark-symbol and easy to recognize. This is however no crucial rule. Many characters work well without special symbols and avoid to overdo it. But you could consider giving your character some special trait or item.

In my case I play Pankrazius the nice but a bit crazy gunsmith, gunpowder-miller, inventor and scientific diletante at LARPs. He shares some traits with me (its hard to avoid if you actually play the character using your own body) but is in many points really different from me. Following the "Silly-Hat"-principle for LARP I sewed and glued a wichhunter-like hat from leather-rests. So by creating Sandy Gears I decided to give him this hat too.

4. Color-scheme and describing.
Many color-combinations are really bad. Neon-green / magenta (unless you are color-blind) for example. Think about how your character should look like. Here I suggest the pony-generator. Even if its disputed in the fan-community, it is a helpfull tool to quick-check if certain colors match.
Here a word for describing characters later: You may know how your character looks like. But your readers propably not. And here a tip of mine: Most experienced writer will warn you about the "Lavender-Pony-Syndrom" (this is overly using descriptors for your characers instead of names).

"Hello. My name is Sandy Gears" said Sandy.
"Nice to meet you!", the gray maned earth pony added.
"May I help you", he focusses you with his green eyes.

They are right. It is annoying and drags the reader away from the character. BUT: If you introduce a new character, use it. Use it exact as long as you need to describe your new and unknown character once. Later avoid it like the devil avoids holy water. (Rules are here to break: If you write from a character-perspective wich don't know the character by name there will likely be descriptors.)

5. Cutie-Mark
There is a big discussion about what a cutie mark means exactly. Faith, Destiny, the one thing that makes the character unique (strange that there are bunches of characters with exact the same symbol...)... anyway. Like trademark-items the cutie-mark is one important descriptor for your character. It can be meant directly (Twists crossed sugar-canes or Pinkies balloons) symbolic (Twilights star sourrounded by exact five other stars) or name-fitting (Cheese Sandwiches cheese-sandwich).
The cutie-mark defines your character somehow - so tinker a while. Your OC will stick to it the rest of his life like to his name.
Or maybe the character is a blank-flank.
In case of my character its a five times blocked (don't know how this block-claws for gears read) brass gear (gold/reddish looks better on gray)
It is just a play on the personal seal Pankrazius Fünfaug (his surename means about Five-Eye) uses. It should depict advanced techical knowledge but blocked by his personal problems and flaws.

So. Now we have a rough idea, how our character looks like and wich name it has.

6. Motivation
Is the character "good" or "evil". Note - one-dimensional evil characters (evil for evils sake) are mostly bland and uninteresting. Give them reasons why they act how they do. You don't need to explain anything that drives your character at the beginning. But it could be interesting to find something out about it.
Further: How do the character relate to the protagonists of your story? Helper? Enemy? Selfish helper? helping them due to ulterior motives of his own?
The longer you plan you use the character, the more you should work out its motivation. Unless you want to write like George R. R. Martin and write a whole novel for the guardsman to the left of the door, just to kill him in the next sequence...
Anyway knowing why your character thinks and works helps you a lot to determine HOW it would act in certain situations.

Sandy Gears is not evil. He is... strange and sometimes its harder to have him around than thousand enemies before you. His big goal is to do something so impressive, that he could prove once and for all that earth ponies are better than the rest. To do so, he works as inventor and sometimes as pilot (for his own flying- machines).
Furthermore he is curious and any chance to learn something new is heartly welcome to him.
In terms of the story he just works for Daring Do in the opening scene.

7. What is your character good at?
Yeah - the Royal Guard may be good at sword-fighting. But does he also play chess? Does he squaredance? Or may he have a talent for tactics?
Keep it simple: I just get some attributes like "Brain" "Body" "Magic" . and use numbers from 1 to 10
3 is the average pony. Our beloved heroes have values about 7 for their special traits (Athletics/Flying 7 for Rainbow Dash and maybe 2 for Fluttershy). Anything above is supernatural and reserved for elder beings and mighty enemies. (There may be some things out there even faster then Rainbow)
Then add some descriptors for special talents. (Likfe "Flying fast" or "Sonic Rainboom" for Rainbow)
Use this as a guideline to give your character some values. This helps you later to estimate how good or bad your character is. Avoid declassing the mane6 with "faster than Rainbow Dash" used on your personal OC...

Sandy Gears is a inventor and tinkerer. He has a lot of knowledge in anything technical and scientific (and some in theoretic magic, even if he is unable to use it.) He builds often helpfull devices like really fast flying steam-powered chariots (with no Pegasi needed) and is able to repair them amidst a jungle with just clay, leaves and vines. He is no effective fighter at all, but can utilize modern weapons (invented by himself of course - mostly hard to use proto-types with hillarious effects.)

8. What is your character BAD at?
In my opinion weaknesses are more important then strengths. Because strenghts make your character just effective, but weaknesses make your character sympathic. No one of your readers is perfect. Everybody fails at something. And knowing your beloved characters have to struggle the same helps a lot to relate to them.
Especially if you write a team of characters, balance their skillset. You don't have one Jack-of-all-trades who is better then everyone else.
Weaknesses could be some quirks too.

For example Sandy Gearsis awfull envy about Pegasi and Unicorns for their powers. He tends to megalomania and the urgent wish to "show them all!!!" - you know with at least three bangs. He is good with tinkering things, but due to his rushed and often absent-minded way of work, the inventions are prone to break at the (drama-wise) best point. And like the most crazy scientists he has a bunch of issues with a normal life and his few friends have to struggle with his changing obsessions for anything scientific.

I could imagine the entry about my character at point 7 was interesting but you had this annoying "oh my gosh - not another such character" -feeling.
But reading the next point and his weaknesses relativated this impression a bit.
(I haven't really used Sandy Gears yet - just a small appereance once. And - beware bragging - i made the points about his strenghtes and weaknesss up on the fly while writing them - its really just practice. You develop an eye for characters pretty quick if you stick to it)

9. Connections
"Niemand ist eine Insel" J. M. Simmel (about "no one is an island") means nopony exists just on his own. Everyone has connections to other characters. May it be the guy from the sweets-shop you buy regularly, your classmates, your friends or your special somepony. Or your enemies.
How is your character connected to the world around it? Who does it know? And how does it deal with his fellow-ponies.

There are a few friends (have to build them though) and he propably would get along with scientific characters. Yes propably with Twilight Sparkle, too - if its ever necessary that this two characters meet.

10. Spike! Take a note
Take notes. Really. Take a notepad or open an extra file. Note at least the name, color-scheme and cutie-mark. If the character has important traits, write them down as well. You just don't want to re-read heaps of chapters to remember details. At best use registry-cards, store them in a box (or templates in a seperate folder)

So - I hope you enjoyed.
And I hope to didn't brag to much. I just thought a practical example I really know of would be helpfull.
If you find anything false or missing - please drop me a comment. (And if you find it usefull too of course)

4082506
This is a good description of a good OC but can you reread and edit out the spelling and grammar errors these might couse people to not take this seriously and that would be a crying shame.
Small things like this are thrown through the who thing....
"Yeah - the Royal Guard may good ad sword-fighting. But do he play chess? Do he squaredance?"
This should read "yeah- the Royal Guard may be good at sword-fighting. But does he play chess? Does he square dance?"
but like I said it was a very well put together set of points and should be considered when creating a OC

I know I suck at editing myself I'm not being mean I am just worried about how others will take it delete my comments if you want I don't mind

4220868

Thanks for pointing out those.
I wrote that thing in one creative rush, and unfortunatly didn't re-read it.

And any comment is well appreciated. You live and learn - so I won't delete any comments, as I don't want to forget what I've learned.

@all
... So. Re-read it now once. Have found and snuffed some typos and worded some things new.
If anypony of you finds something wrong or missing - please comment or drop me a PM.