Waddaya think smarty pants, role play of course 🙄
j/k
Well basically somebody comes up with an idea for a game (i.e. a Matrix game), posts information people need for their characters, which usually looks something like this (I'm using an example from my SW game which is actually a hosted game, not an unhosted one):
Name
Species
Physical Appearence
Template (examples from my game are force user, bounty hunter, smuggler, slicer, vigilante, etc)
weapons/armor
other items
droid
ship
background
Then people who are interested post their characters, and depending on the type of game, one of two things happens:
Hosted--the gamemaster (person who started the game) will say where everybody is, what they are doing, controls Non-player characters or NPCs, etc. They have a storyline already thought up, but they don't outright tell it to the players. Instead, they guide them along, for example "A tough looking guy wearing armor and carrying around a heavy repeater starts shooting at you". The obvious thing would be to shoot back at him, though the gamemaster doesn't just tell you to do that.
Unhosted--everybody controls their characters, NPCs, and the environment equally. Sometimes the players have decided on a plot prior to gameplay, sometimes they just take things as they go.
I apologize for the long post but that's really the only way to explain it.