Character creation (also: character generation or character design) is the process of making a character whose role the Player will assume. Character creation is about realizing the concept of the character within the options and rules of the RPG system.
Character creation is typically the first step taken by the players (as opposed to the gamemaster) in preparation for a game. The result of character creation is a direct characterization that is recorded on a character sheet. In its most comprehensive form it includes not only a game-specific representation of the character's physical, mental, psychological and social properties in terms of statistics, but also often less formal descriptions of the character’s physical appearance, personality, personal back-story (“background”) and possessions.
Character advancement refers to the improvement of a character’s statistics later in the game. The player will modify existing stats and add new ones, usually by spending experience points or when gaining a new experience level. Character advancement typically uses similar rules as character creation.
The term character development is, in some contexts, used interchangeably with character advancement (in a sense similar to professional development or Human Development), whereas elsewhere character development refers instead to the player’s indirect characterization of the character through role-playing (in a sense similar to film developing).