Start with a clean and clear glass jar or container. Your recycling bin most likely has a good option. Other fun options would be a fish bowl, coffee pot, pickle jar, and more.
Cover the bottom of the jar with a layer of pebbles or gravel for drainage.
Add a small layer of activated charcoal.
Add a layer of moss to help the potting soil from staying out of the charcoal layer. This is optional. if you aren't too picky about the layered look you can skip this.
Add a thick layer of potting soil. It is a good idea to get potting soil made for indoor plants if you can.
Shake off the dirt that comes with the plants.
Use a spoon or your hands to create the hole for your plants.
Plant small ferns, succulents, or even cacti in your soil and pat it in gently. You want to keep about 1 plant per 1-inch diameter, if possible. A good resource for small plants for your terrarium is your local garden store fairy garden section. Generally, plant your largest plant first so you leave enough space for the smaller plants.
Once you have your plants planted add additional moss, gravel, or decorative rocks to cover the soil.
Finish with your small extra accessories, if you decide to use them.