To start, back ground, back ground, back ground.
Name of town, name of parents, where were you conceived, siblings and their names (including rolling to see how many have survived and still live), extended family with aunts and uncles, what jobs do the have or businesses do the own, what crafts is their home town known for, rich, middle class, poor, etc. In these details a persona will emerge.
In game, focus on relationships within the community. The law, the merchants, the temples, love life, how wealthy is the community, etc. The old dungeon crawl days created a world without personality, nothing more than merchants with tons of swag and unlimited gold. My goal is to create unique personality. Towns and cities and villages should have different vibes and offer different opportunities to the players. Not every community will sell weapons or armor, some won't have herbs or potions, others may not have wagons or horses. Communities should be as unique as characters, unlike the cookie cutter corperate business found in the modern world. Fantasy worlds need to avoid standardization.
A great rule that aids role playing is set Dev Points per level. This rule prevents a player from being punished when he wants to play a low Sd character, or a mage with no Me, or a sickly soul that catches a new cold every week.