I first come up with an idea for a story and/or characters. I usually base my characters off of other fictional characters (not sure if this is a good idea for some people, this is just my way of doing things) and then I continue to develop them until they are no longer the other fictional character copied and pasted into my story.
For developing characters, I usually imagine events from the plot (or just random scenes not in the plot) scene by scene and play it out in my head. I usually use character surveys (just look up original character survey) or OC quizzes (e.g. Mary Sue quizzes) to find out more about them. Sometimes, I’ll make my new characters interact with an already developed character from a different story and see what happens.
What I do is find what the story needs. It may be a cold, hard person, or a mother-like figure, then I give them a name that would sound best for their personality. sometimes I look up what names mean, but not very often.