Being greedy, cruel, and selfish aren't flaws?
I agree that any character needs flaws to add depth. I also think that any antagonist needs virtues to keep them realistic as well.
As for naming characters, the first thing I do is think of words that define the personality: strength, wisdom, gentle, beautiful. Something that could sum up one or more of the most prominent traits. Then I'll start looking up names on baby naming sites. My personal favourite is
27,000 Baby Names, Meanings and Origins at Baby Names World because of the versatility of the search engine. Using the advanced search you can choose the gender, country/language of origin, the letters you want it to start or end with, etc. You can pick the number of countries you want to look at as well, to get a good spread. Or you can look it up by meaning. So if you want it to sound like it's from a particular kind of region, or be a particular meaning, this is one handy-dandy site to have. From there, I either use the name as is, or more likely I modify what I find into something completely unique for my world, but which still sounds comfortable to pronounce because of the similarity to names that already exist without necessarily defaulting on actual common names.
I think it's also a neat idea, if you're really world building on top of everything (and I'll now have to do as well), to develop what names would be common in your world, even region by region. The "John Smiths" and "Michael Elis"s of whatever land you're creating.
I certainly don't disagree with any of the methods above, including deciding that the story revolves around, for example, a mage. Then maybe set up a conflict for him: The head of the Mages Council is corrupt and planning to unleash a great evil over the land for reasons related to greed and personal weakness. Knowing what he's going to go up against eventually, determine basic traits, like curiosity, a sharp mind that can put together pieces of a puzzle that look unrelated, a quirky sense of humour, and for a couple of flaws he's a womanizing drunkard who has never stopped to grieve over the death of his younger brother. Then pick what magic he uses. Let's say elementals, he's a Fire mage (I'd usually go for Darkness or Water myself, but Fire's nice and easy and pulls me out of my own comfort zone). Aspects of Fire can be added to his personality now. A voletile emotional base -quick to anger, quick to cool, quick to judge-, passionate, possibly forceful, a little inconsiderate, but generally warm and friendly. Now we can pick a name. We want something that sounds unusual, but which is easy to pronounce. We don't want to make up a language for this because he's human and distant from any other unusual race, so we're going to use my previous method of naming. Let's go off of names that include "fire" somewhere in their meanings:
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Aedus - Fire (Gaelic)
Agnimitra - Friend of the fire (Sandskrit)
Atash - Fire (Afgan)
Fintan - White-haired; white fire (Gaelic)
Lyulf - Fire wolf (English)
Resheph - Fire (Hebrew)
Tanguy - Fire warrior (Breton)
Uddhava - Sacrificial fire (Sanskrit).
As a basic list. Then you can sit back and look at the meanings. Personally, I like Sacrificial Fire, Fire Wolf, and Fire Warrior. Looking at the names themselves, I like Fintan, Lyulf, and Atash the most as they are. So, if I pick one of them, I now have an idea of what kind of flavour I can give his home land. Seeing the names there, there's very little that needs to be done to make them fit a fantasy setting, so lets go with Lyulf, not only because it sounds cool, but aspects of the wolf can now be worked into his personality. That sense of innate power, a quiet reserved confidence, a strong sense of loyalty and kinship with those closest to him, and a fierocity that well matches fire itself, but with a honed, vicious edge that may not have been there before. A righteous vengeance.
It's an English name, so surnames shouldn't be hard to fabricate for him. I definitely suggest not using actual surnames so often in fantasy because it begins (in my opinion) to eat away at that foundation of fantasy that we're building, so let's call him Lyulf Greatwater, for further character development. He's the only member of his family to use fire within a long line of mages with greatest strength in water, so notably that their surname became synonymous with their element.
So merely in deciding what he is, what he uses, basic traits and flaws, and what his name is, we have very securely developed what sort of person he is. From there you can delicately insert him in his new world and see what reactions you get by throwing situations at him, thus discovering who you have created as you navigate him from point A to point Z, your ultimate conflict and climax.
Not my usual method, in fact it's really the first time I've done that, but he gives much, much more than a basic framework or skeleton to work from, and even I find myself impressed by the depth you can gain just from those pieces of information. I'd be interested in seeing what he does and where he goes, the kinds of experiences he wracks up with quirks like womanizing and drinking and suppressed grief mixed with an unusually sharp mind and, we can surmise, an attention to detail which allows him to make connections between seemingly unrelated facts despite his vices. He is his own personal dichotomy. If anyone would like to use him, feel free. I'd love to see what you come up with. ^_^
But I've already expressed one of my own personal methods on the first page of this post, and that's really more of what I do. Little vignets of scenes that come to me, inspired by this or that - a movie, a game, a cloud, a conversation- and build from there. I like how organic it can be, how within the complexity of my stories connections crop up on their own, taking loose ends of other stories and tying them into the new ideas as if they'd always been there to begin with, or always meant to be and had just been waiting around for the true connections to pop up.
A lot of the characters came from personas created for the S.C.A (Society for Creative Anachronism, look it up. ^_^) and the stories for why one persona would know another, and then how they could fit in the world I'd already been working on. Many (many, many) others came from online role playing. For example, the Dorosai (yes, I know it's similar in appearance to Dorsai), or head of the human kingdoms, is the very first role playing character I ever created, though more like Fionna 3.2/Phae'ana 1.2 as she's undergone not only revisions, but at least one complete overhaul.
I've taken many situations I really enjoyed from role playing experiences and reworked them to remain part of the characters I'd created, but to be my own work specific to Eleasia. And in some ways, the world building itself lends itself to stories and characters. With an Age of Legends, for example, there was a huge, huge battle and bloodlines from some of the most notable warriors still floating around that play key roles in "current" events. The vague ideas of these ancient warriors became more solid of necessity to me as an author, because knowing what happened allows me to use it to colour the "present".
So, I think there are just too many ways to approach character creation. Try some things out, experiment and just see what feels right and gives you the most to work with comfortably. But most of all, have fun with it, because it's not worth the effort, if you ask me, if you can't enjoy what you're doing.
*NOTE* Any and all mistakes grammatical or otherwise are the official mistakes of this post and will remain due mostly to the laziness of the author. Thank you.
. . . The End.