Step 1: Race and Gender
You start off by picking where you are from. A map of Tamriel is displayed, and clicking on a province will give you a short description of its inhabiting race and a confirmation box. Once you've selected your race, you choose a gender. Only two races have any gameplay effect, and gender does not affect your character's abilities.
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 a custom class.
Each class has different primary, major and minor skills, attributes, advantages, and disadvantages. Make sure to 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 affect your starting skills, equipment, and reputation. You may also skip them, which has the game answer the questions at random.
Step 4: Name, Face, and Attributes
Now you need to pick a name and a face. Neither makes a difference on your character's abilities. Afterwards, points are randomly added to your class's base attributes and you have additional points to distribute to the attributes you want. You can also reroll, which randomizes the points added to your attributes and the points you have to distribute. You can also save a roll to load it after a reroll. After determining your starting attributes, you get six points to distribute to your primary skills, six points to your major skills, and six to your minor skills. You are finally shown an overview of your character and given one last chance to make adjustments before confirming.
Once you are done, you set sail for Daggerfall and your ship crashes. Your character then starts the game in Privateer's Hold.