When designing a monster, avoid extremes. It is a common mistake to make a monster incredibly tough for no reason. Really tough monsters are very rare! If a monster has an extreme ability or combat statistic, there should be a good reason. In the same light, fit the monster's abilities to its description. Players need a fair chance to anticipate what the monster might do. For example, a monster that can fly should have wings, or else usually be encountered aloft. If a monster will have a surprising ability, keep it to just one, and have a good reason for the surprise.
Not all monsters have to be evil. There are many other reasons a monster can be dangerous without arbitrarily making it evil. For example, any creature will fight to protect its family or territory whether it is good or evil.
Characters should be able to negotiate with or intimidate many creatures, but negotiating with a monster does not always mean giving it treasure. Most animals will put off an attack if tossed a free meal they can eat in peace; intelligent creatures have many different motivations. Try not to force characters into having to kill every monster they meet. If a monster is left alive after an encounter, it might be encountered again, and become a regular part of the campaign.
CLIMATE/TERRAIN: Restrict your monsters reasonably. As a rule, only tool-making creatures can be found in every climate or every terrain. Remember that the physical design of a monster should make sense for the climate and the terrain.
FREQUENCY: Monsters should not dominate the landscape unless your campaign plot requires them to. Most monsters avoid settled areas because organized groups of humans and demihumans tend to kill them.
ORGANIZATION: Give a lot of thought to this entry; it determines the group tendencies of the monster. A pack can be controlled by controlling its leader. A flock, on the other hand, has no leader, but it does have a pecking order.
ACTIVITY CYCLE: Most monsters need to rest. When are they out and about? When are they sleeping? These habits should make sense with the diet and climate/terrain of the monster.
DIET: What does the monster eat? Not every monster is a man-eater. A wild bull is just as dangerous as a tiger, but it does not eat meat. Remember, fangs and claws imply carnivores, tusks and horns imply herbivores.
INTELLIGENCE: Avoid the tendency to make monsters too intelligent or too stupid. A creature living in the middle of the jungle with no manipulative organs is not likely to be intelligent. Really high intelligence usually implies civilization, or at least sophisticated tools. On the other hand, monsters that must fight to survive must have enough intelligence or other natural ability to conquer their foes.
TREASURE: Treasure is usually collected only by intelligent creatures. An animal type may guard a treasure for another creature, but the treasure itself belongs to the intelligence that set it there as a guard. Monsters that care little for riches and magical items might still have some as a result of encounters, but things will be scattered and ill-kept, often rusting away to worthlessness. Intelligent monsters, on the other hand, will use their magical treasures to their best advantage -- which may be no help at all to the characters!
ALIGNMENT: This is a broad description of the moral and ethical tendencies of the monster. A creature of animal intelligence has no morals or ethics, and hence is of neutral alignment. In general, try to avoid extremes, unless these fit the monster.
NO. APPEARING: The number of monsters typically encountered should correspond to the other facts about the monster. A solitary monster does not travel in a pack of 20! In general, carnivores travel in small groups, herbivores travel in large groups. This number is also a good way to keep things balanced; weak monsters are dangerous in large numbers, while a strong monster all alone is easy prey to a well-organized group of heroes.
COMBAT STATISTICS: This includes such values as Hit Dice and Armor Class. They should match the physical description of the monster. A well-designed monster fights the way it looks. A small, fuzzy creature with big, soft eyes should not have 25 Hit Dice, an Armor Class of -8, and swoop through the air to attack. The amount of damage done should reflect the weapon being used. Avoid the tendency to give monsters excessive Hit Dice and damage capabilities. The DM is the only person who gets a kick from seeing a PC suffer 40 points of damage in one round; players don't find that amusing at all.
See Chapter 9 of the DMG to determine THAC0 for monsters.
APPEARANCE: Include in the physical description of the monster its size, weight, color (skin, hair, eyes, etc.), smell, noises, type of movement (graceful walk, shambling gait, etc.), typical clothing, and preferred weapons.
COMBAT: Include any special combat abilities or disabilities. Be sure to cover any basic strategies or tactics the monster might use. Remember, smart monsters use smart tactics. The strategies should reflect their natural advantages and disadvantages.
HABITAT/SOCIETY: How does the monster relate to others of its kind, and to strangers? When do they work together and when do they fight? How do they choose leaders and how do these leaders rule? What are the goals of these monsters? Where do they live and how does this affect their behavior? Do they use or make tools? If so, what types and how are they made? Why does this monster have treasure? How does it get it? What is the nature of the family, and how many live together? Does the monster have special guards or allies and how frequently are they found together?
ECOLOGY: This should include the types of food eaten -- as well as what eats them, if anything. Any useful by-products should be listed, such as fur or edible parts. You may list uses for magical items or spells. On the other hand, don't turn your monster descriptions into shopping lists. The PCs are heroes, not butchers or fur trappers. List other creatures that live in harmony with the monster or compete against it, along with information about the size and nature of its territory.
VARIANTS: If there are major subraces, they should be detailed here. This may be a stronger leader type, an inferior servant race, or a DM special, such as skeletons that hurl their finger joints like magic missiles.
XP VALUE: Guidelines for awarding experience are found in Chapter 8 of the DMG. Hit Dice Value Modifiers for psionic monsters are +1 if the creature has access to only devotions, +2 if the creature has both sciences and devotions.
In addition to the Hit Dice Value Modifiers listed for monsters in the DMG, consider the following optional modifiers: +1 for any special movement which gives an advantage, not just flying; +2 for magic resistance over 50%, +1 for magic resistance of 50% or under; +2 for breath weapons which can cause more than 20 points damage per attack, +1 for other breath weapons.