Honestly? Not a lot of people do. It's really hard to find role players that treat characters as if they were writing a best-selling novel series on them. I don't expect everyone to do that either; role playing isn't anyone's career. It's used for pleasure or to pass the time. But there are authors and writers on this site too (if you venture on deep enough) that take this serious and want an actual role play with a plot and characters to play the parts.
Anyone that actually sits down, looks at their character or the starting points of the character and plot whether or not they like something for them (whether it be a trait, quirk, or even their fashion taste) is creating a character that isn't one dimensional. Giving your character more than a name, a FC and an age is developing your character.
Let me tell you, doing this isn't always easy. There are some characters you could have road bumps for and want to scrap and never look at again. Since you asked how, lovely anon, I'll share how I develop my own characters. This isn't the definite way to this just so you know. This for if you're struggling to make a character and want some tips and pointers to help you out:
1. Start with the basics; (name, age, gender, species, orientation, etc) DO NOT START WITH THE FACE CLAIM. Save that for the absolute last.
2. Go onto family, relationships, etc
3. Now, start their back story/bio. Tip! Don't make it something your partner/reader can't relate at all with. Give them a strife that someone can go 'Wow, he also struggles to cope with (whatever this may be)' or 'She also (does this) too?' We like being able to connect with the character in some way, it makes it more fun. Also, stay away from more overly tragic and over eventful back stories. I'm not saying make them have an outstanding childhood and now work the job of their dreams as a wealthy bourgeois. I'm saying to make this character meet in the middle. Sure, you can make something as traumatizing as abused and neglected as a child, but balanced that horror out with something good, like how they were exceptional at the piano and got a full scholarship to a college because of that talent and escaped their horrible life. Make their misguided past help them become stronger, wiser and better than they were before. Also, do not harp on your character's past life; nine times out of ten, people don't really enjoy this.
4. Personality time! First, start with their imperfections and their flaws because everyone has flaws. After that, let their lovable traits shine! This makes your character's strength really glow next to their flaws.
5. Quirks, quirks, and more quirks! Add things to your character to make them eccentric and different from all the rest! Of course, keeps these rational to whatever they are as a species.
6. Once you're comfortable and confident in the character you made, slap on that FC and submit that baby!
If this helps out anyone, let me know and show me your character too! <3