This was graciously supplied by Author Steven lake:

One of the things we do as authors, that most probably don't realize, is that we act as shrinks, mental analysts to them much as a psychiatrist would.  We get behind their eyes, we poke around in the recesses of their minds, and we go completely Freudian on them at times.  But that's just part of the writing process.  Without doing this we end up with hollow, shallow characters with no real depth, and thus they are unlikable.

So what are the steps to "Shrinking" your character?  Well, first, get to know them.  Yes, I'm thinking on the same terms as getting to know your best friend, finance, parents, etc.  Find out what their habits are, what do they like or hate, what quirks or failings do they have, what is their history, and so on.  Literally get to know your character like they were your brother/sister.

For some people this is weird.  For others it's downright crazy.  Maybe it is.  But let me ask you this.  How can we expect you to share with us all the wonders of this character you're writing about when you don't even know them yourself?  That's where the whole psychoanalyzing comes in.  Now you don't need to be a PHD in Psychology to do this.  Believe it or not, you already do it every single day.

Anytime you have direct or indirect interaction with someone else, you're constantly evaluating them, trying to determine what they're saying and what each action they're doing means.  The primary reason is, you're trying to see what's in it for you.  Yes, that sounds a bit selfish, but that's human nature.  Every single thing we do every single day is focused around a mindset, whether visible or invisible, that focuses constantly on meeting our own personal needs.

You should thus take this same approach with your characters.  What motivates them?  Why do they believe this?  What is their reasons for that?  Get to know your characters as though they were a part of you, because in many ways they are, since every character you create is an extension of you in some way, be it great or small.

One of my favorite ways to learn about a character I'm creating or writing about is to literally become the character.  It typically involves a bit of playacting.  You feel their emotions, think their thoughts, act their actions.  If you think it's weird, it's not.  In fact, it's no different than what professional actors do.  Just be sure to disengage from the character periodically during your exploration and writing period so you don't get stuck that way.  

But once you get to know the character(s) intimately, you'll be able to write them with such depth and clarity that you won't have to think about what you want them to say and do.  The characters themselves will write their own story.  When your writing goes from you creating the story to the story more or less writing itself, then you know you've succeeded in ingesting the characters into yourself.

Once you can do this, the rest is merely fun, excitement and adventure with your new best (albeit virtual) friend(s).

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