Characters are the main driving force in most stories, though there are exceptions. The purpose of a character is to provide a focal point in a story and to use that character to drive the story along. A character can be anything within a story that adds substance. It does not have to be human (or some variation thereof), rather it can be an object as well.
How can an object be a character? This may seem unusual on the surface, but there have been instances where the main character within a story has been a house or some other structure. The object itself is not a living breathing thing, but rather what the writer imbues the object with, what emotional states the object creates with other actors within the framing of the story. One can see this most famously played out in stories of haunted houses (Amityville Horror comes to mind) wherein the house itself was the object of characterization.
A couple more examples would be the Computer in Star Trek and the Com-Pewter in the Xanth novels by Piers Anthony of objects being characters. These are all characters in the classic sense, though maybe not the normal sense. They are imbued with feelings, emotions, thoughts and actions.
There can be many classes of characters within a story-line. There are the Protagonists, Antagonists and secondary characters. The difference between them is seen as being good (Protagonists), being bad (Antagonists) and being fillers (Secondary Characters). Though there are cases where the roles are reversed and the Antagonists are seen as the good characters, otherwise known as Anti-Heros.
Whatever the case may be, the meat of a story involves good characterization to move the story along and to bring about a desirable outcome for the writer and for the reader to enjoy.
The importance of characters, what class they are within a story, is very important to give a story continuity that is seamless. Bad characterization will make a story disjointed and pretty much unreadable and not very enjoyable to your reader.
So what makes a good character? Characters that are fleshed out, that have more than two dimensions within the confines of a story. Characters that readers are able to connect to as individuals, connect to emotionally (that is the best type of characterization, when your readers care about what happens to a character) and that readers can connect to intellectually.
How to best create a character that can meet the above qualifications is largely up to the writer of the story (this seems like a natural sentence, when in fact it is not) as there are at times outside influences that can create a character beyond the writer’s control. Two known cases of this happening are Agatha Christie’s Hercule Poirot character and Ron E. Howard’s Conan character. In these instances, the writer lost control of the characters and outside forces influenced them as opposed to the writer influencing them. While this may sound good on the surface, it is the writer that suffers the most from out of control characters. But I digress.
Back to creating a good character. As stated before, this is largely up to the writer. Taking all of the learned experience of oneself and being able to apply it to a character is a great way to fashion a character that is likable.
Remember, you as the writer, are creating something that appeals to you on some level. You have an emotional investment in the character, an intellectual investment. These are what you want your reader to feel for the character as much as you do.
Writing a good character can and should come from within oneself so that you are satisfied with the character. Are you comfortable with the way the character is turning out, is that what you would want your character to do in certain situations? What happens if your character were to make a mistake? Thinking in these terms allows you to flesh out a character to be more than just words on a page.
Your character is an investment that will help your story to grow and be worthy of more than just printed paper (though in today’s world, that is becoming a rarity as a lot of publications are becoming electronic). Your character will sell your story to the most people.
To recap on characterization. Have solid characters, ones that are fleshed out. Let the reader of your story have an investment in the character. Most importantly, let your character have a purpose for being. Creating a great character is an awesome experience, but if your character has no purpose, there is no reason for the character in the first place.