I suspect some writers breed them in a dungeon below the privy. Or have a hive of them somewhere in the woods near a creepy cabin. It’s amazing what evil villains some authors can come up with!
(Insert envy here…)
Mine almost always start their life as a real person. I find it much easier to base characters on real people, and then go from there – changing this, adapting that, turning them inside out and put putting them back together in a different way. Sometimes I don’t even know their real-life inspiration. One of my characters was inspired by a man walking a dog in a park, because he was wearing a hat that would have looked creepy on an evil mechanic.
Yeah I know, my mind wanders on strange paths sometimes.
However, I admit to sometimes casting real-life people as villains without changing much more than their name, age and gender, and adapting the setting around them. Obviously I’m not going to tell which ones are real and which ones aren’t, but I bet my friends and family could point some out if they squinted a bit.
They’re always minor characters, because I can only take real life so far, but it provides me with a whole nest of possible would-be adversaries. Call it my personal form of revenge on nasty people.
PS: And yes, I have also used nice people to model for characters. Gotta have some balance.