HOW TO MAKE A GAME
Designing a video game is something anyone can do. Actually realizing that design to where you play the game is infinitely harder. Talking other people into playing your game could probably be the hardest part of all (except during open beta.) We aren't really concerned with the second two steps for this article. We are simply designing a game. Actually, we are only starting to design a game. The steps I show here are ways to get ideas. You'd then parse it out into an actual design with specifics and better categorization.
Depending on what type of game you are designing, you have different questions. Some games are focused on different things than other games. It's my opinion that MMORPG's are based on what a player can do. So, the first question you have to ask yourself is 'What activities to I want the players to be involved in.' (I'm going to give some sample answers to illustrate the process. For a real game of course there would be much much more.)

What Activities do I want the players to be involved in: Now that you know what your want your players to, you have to figure out how to make them do it. Players are unruly beasts, and left to their own devices, they'll do just able anything. The gameworld needs to be set up in such a way that it promotes certain behaviors while curtailing others. Simply saying, 'gamers will do this because it's fun' isn't quite good enough. So, the second step is coming up with motivations for each of the desire activities. It works best of these are interwoven.

How do I encourage those Activities? Once you have a list of motivations that you feel is sufficient to actually have players accomplishing the activities you planned, you then move on to the step of deciding how they will do these activities. This is actually a huge part. Depending on which activity you are describing, this could go on for pages. I'll just show a couple sentences as an example.

1. Hunt Animals and/or Monsters
Players will go hunting for animals and monsters. This could be a full-time profession, or it could simply be a diversion or 'shopping trip.' The hunt will consist of locating and going to where a 'target creature' lives, getting into position, and then killing or capturing the animal. Animals are different from monsters. You have different reasons for hunting them, and you hunt them in different ways.
Animals as a group come in two styles: wild and domestic. Domestic animals aren't really hunted. They are found. Once found, you either harvest them, or claim them and take them home to be harvested later. These animals aren't scared of the players. In fact, they are quite ambivalent to the player, except when they are claimed. Then they follow simple directions, such as 'follow' or 'stay.' Wild animals are scared of the player. If the animal sees the player it will try to run away. It will run until it is trapped. Depending on the aggressiveness of the animal, it may then fight back, or simply cower. Hunting wild animals is accomplished in several ways. You can sneak up on the animal, trying to avoid detection until you can get a 'kill shot.' You can herd the animal into a dead end and fight with it, or kill/capture it while it cowers. Or, you can chase the animal trying to get in range for an attack. Depending on the situation, attacking a fleeing animal can have several results: the animal may turn and attack, the animal may stumble and fall, allowing you to catch up, or the animal may continue running while damaged.
Monsters are either unnatural/mythical animals, or they are sentient but considered evil by your characters culture. These are mainly hunted for story, quest related reasons, or to claim whatever items/treasure they may have. A common story related reason would be defense of your community. The target creature is causing problems and must be eliminated. Quest related hunting trips could be test your resolve and ingenuity on a known challenge, or retrieve a stolen artifact. Finally, wealth concerns are easily understood. Some monsters are simply collectors of things powerful or 'shiny.' The common hunt for things considered to be monsters almost always ends up in a fight. You can try to sneak up on them, but as soon as your presence and intent is known, the monsters will attack you.
I guess that was more than a few sentences. You'll notice that there was alot of random information in those paragraphs. This is basically just a high level description of your world. Once you have descriptions like these for each of your desired activities, you have the basis of your MMORPG world. You then comb over these descriptions and pull out the details. Examples would be listing the type of 'animals' that exist in game, and the resources they provide. You'd also enumerate the skills and equipment involved with sneaking and hunting.
As you can see, each step starts small, and then is expanded with more details. A sentence becomes a group of sentences. Then you write a group of paragraphs about the topic. Then the paragraphs become outlines and lists. Once you have everything split up and categorized, you start chaining it altogether and make sure it fits, all the while filling in the blanks and added them to your list. When you're done, you have the design for a game. It's important then to go back, and see how well the players will be able to accomplish those first goals that you started with.
Then it becomes time to tackle stage two, actually making the game a reality. That's a stage I've never quite gotten to yet. Let me know how it turns out.