The GMs of my gaming group would discuss world design and the creation of races was a favorite topic.
Life forms, especially sapient races, are generally created through three basic methods:
1) Divine creation -A powerful being conjures a race out of nothing, such as most of the races of Middle Earth.
2) Evolution -Races endure a long process of development and environmental adaptation.
3) Engineering -Using magic or science, one or more races are modified to become another, unique form. The Orcs of Middle Earth were engineered from Elves.
Whatever criteria used to create a unique race, either biologically or mechanically, leads to what makes that race sapient and from there, technological. Races without appendages like thumb or other prehensile limbs for tool use may have difficulty advancing on the technological scale. Races limited to only water may never get to use fire and derive the many technologies associated with fire, such as metallurgy and ceramics.
Most importantly, not all races have human motivations and thought patterns. Elves and Orcs may be humanoid but their thought processes and basic motivations are entirely different. Orcs have short lives and look for immediate gratification; Elves are immortal so are long term planners, and live as if they have all the time in the world for projects. While humanoid races are similar, what about insectoid and reptilian races? One of my GMs, who has designed hundreds of unique races for his own world, designed an insect race that used psionic-based telepathy for their primary communication as they had no speech. Among their own race they could use clicks, scents and gestures and could link thoughts but communication with other races was always problematic as most races considered telepathy as intrusive and suspect. Playing an Eigarian (they settled in an area called Eigar) was fun as I pretty much did all the things that made them hated by other races -I messed with peoples' minds. I made enemies attack their own party, or made them believe that they were in a lovely dream world...or in complete agony.
You could design totally random races but I prefer making a complete history on how a race evolved or developed over time.