Step 1: Race and Gender
To start off, you must first pick where you are from. A map of Tamriel will be on your screen, and clicking on one of the provinces will give you a short description of each race and a confirmation box. Once you've decided your race, you should choose a gender. Both race and gender have an effect on your character's attributes and resistances, so choose wisely.
 Step 2: Class
Choosing your class will define your character at the beginning. You can either choose one of the pre-made classes, answer a questionnaire that will choose your class based on your answers, or make your own class.
Each class has different Primary and Major Skills, attributes, and advantages, and some even have disadvantages. Be sure to make sure that you get a class that allows you to use what you want.
 Step 3: Background
The game generates a background for you based on your class (or what class you are most like). These questions have an effect on your base reputation with some classes, starting equipment, and can even give you some bonus skills to begin with. If you don't care to answer these, you may skip them, giving you a randomized version of yourself as if you had answered the questions.
For a list of all the questions, visit Background
 Step 4: Name, Face, and Attributes
You're almost done. Now you need to pick a name and a face. Neither make a difference on your character's abilities. However, afterwards, points are added to your classes base attributes, and you also have points to distribute to the attributes you want. If you want to, you can "reroll", which randomizes the points added to your attributes and the points you have to distribute. You can also "save" and "load" a roll, if you get a particularly good roll, but want to continue trying. Next you get six points to distribute to your Primary skills, six points to your major skills, and six to your minor skills. The game then asks for a confirmation of your character.
Once you are done, you set sail for Daggerfall and your ship crashes. Your character then starts its journey in Privateer's Hold.