Yo dude, just a heads up, I'm sure the mods will hop in here and give you a more detailed explanation or help more than I can, but I might as well do what I can to help you now.
You need a premise of the story. (Is it an Alternate Universe or does it begin at the beginning of the game, where instead of following the events of the game the Roleplayers choose their own path, or is it a new story entirely within the universe?) You basically have free reign here. Basically, in your first post you need to establish the story and character templates.
Once the story has been established, you need to do characters. As you said, you can give Roleplayers as much freedom on this as you want, or restrict them as much as you want, such as being limited to canon characters only, or dog form of the characters... whatever. You control every element of this roleplay right up until people start roleplaying. Then it's really a Free-For-All, but you are obviously able to shape the story how you want, as it's your story.
When people sign up, you need to provide them with a template. A template is a list of attributes that you and everyone else needs to know about their character. A basic template usually looks like this:
Name:
Age:
Weapon: (If applicable to the RP)
Personality:
Appearance:
History/Biography:
You can add anything else to these templates as you see fit, such as if they are a dark warrior or light warrior etc. etc.
You need an established ground for your RP before you can begin the story. To get a better idea of what I mean, I'd suggest scrolling through other sign-up threads and seeing how their threads are laid out.
I'd definitely suggest checking out the rules of the RP section:
http://forums.khinsider.com/roleplaying/163400-roleplaying-rules-guidelines.html
And since you want to make a Canon Roleplay, this will be useful to you too:
http://forums.khinsider.com/canon-signups-discussion/166130-so-you-want-make-canon-roleplay.html
As in your previous thread, mods already gave you assistance, asking you to read the rules and guidelines and various other material so you can Roleplay at your best.
If you have any questions, I'll do my best to answer them, but I'm not staff here, I'm just trying to help you. For help from those more experienced, go to the
Roleplaying Tavern.
If I've confused you, definitely go there and fire your questions away!
I hope I helped even just a little bit, have fun Roleplaying
Sorry for the long-ish post, I just wanted to streamline some information that would help you Roleplay better, so you can have a simple understanding before reading the more detailed rules and guidelines
You really should read them, every new Roleplayer should.