Fantasy cities are an interesting conundrum. On the one hand you want to make them vibrant, exotic and interesting. On the other hand you want to tap into the occasional sense of familiarity because, after all, these are the urban spots of fantasy so it's nice to feel connected to them. You're best off creating a city that has a strong theme that ties it all together to distinguish it from other cities, but you also want to ensure that there's enough variation within the city to justify calling it one. You also don't want it to be yet another Medieval or Low-Tech-Version-of-Victorian London but you may not have much information on cities that aren't in that mould.
So what do you do? Where do you go from here?
You could go and google "Fantasy Worldbuilding Cities" or some other similar collection of keywords to look up advice given by writers for writers on the subject. When it comes to worldbuilding and research, a lot of the same issues apply to both Game Masters and writers, after all.
Some decent links include the Fantasy Worldbuilding Questions Document, the Greatest Cities in Science Fiction Fantasy for a look at some famous ones and why they're so cool, and rpggm has a list of links on the topic.
But for today we will look at it in terms of two main factors of city building: Internal Consistency and Something Cool.
The Something Cool part is that little iconic flair or thematic line that sums it up and gives it an essential flavor. It might be something physical such as a city in the clouds or on a dragon's back, something thematic like "the city that never sleeps", or something based around a social custom like foot binding or dueling.
The Internal Consistency part is when you take that piece of iconic flair and run with it. Why is this city (especially a fantasy city) called the City that Never Sleeps? Is it because there are nocturnal races that take the night shift? Is it because the city is on a constant state of alarm due to the presence of dragons in the local area? Is it that the city is known for its decadence? Is it a mixture of the three?
Brainstorming is your friend here. Take that Something Cool and run with it. Come up with as many options you can think of and then weed out all the ones that seem tired, old, or just plain don't work for your campaign or wider setting.
Then take those details and have a real think about them. If the city is known for its decadence, then what does that mean for the paupers? For the nobility? What sort of decadence is permitted and how does that tie in to the wider customs and social interplay? Is the place starting to fall apart because the city wastes its money on nonessential parties? Is morale high? Low? Is it easier to get in through the city gates or harder? Does the decadence spill out into out-and-out corruption?
And what does that mean? How does that affect class boundaries and the presence of magical artefacts? Also what sort of quests might a decadent and sleepless city hand out?
What's that? You didn't think of the city's style affecting the quests?
Shame on you!
Matching the quests to the style in some way is one of the best ways to get your players to know the city. They spend much more time questing than listening to backstory, after all (hopefully).
A decadent city might use fetch quests, hunt quests, dungeon quests and delivery quests just like your regular fantasy campaign but the flavor should generally be decidedly different. Fetch quests might be given by alchemists to collect rare herbs for a potent drug, given by the merchant in search of clues to an enemy's dirty secrets or by a noble in search of expensive bottles of alcohol. Hunt quests could involve finding attractive dancers for the ball, hunting an impressive creature with the nobility through the parklands, or trapping a nymph to be the spectacle for a gala. Dungeon quests could become quite literal with fantastic creatures getting loose beneath some noble's playhouse ... succubi and nymphs and dryads, oh my! Delivery quests could involve tokens of affection, letters between the beloved or a love potion that needs to be imbibed by the right person at the right time.
Let's face it, if you were part of a party who had to go through all of that you might get a sense of what this city is all about - socially, politically and thematically. It's a great and easy way to do it and it sure beats having to use more exposition.
Of course, the micro-settings you pick for your scenes are vital as well. A meeting in an opium den, battle in the rafters of an opera house, or gathering in the private wing of a mansion dedicated to a noble's heir can all add to the vibe and allow you to really immerse the player characters in the uniqueness of this city. Now this doesn't mean you can't have classic taverns, cozy cottages, or other non-decadent-urban-spaces but they should feel a bit different, a bit special, by providing contrast to the main points of the story.
After all, the more normal and broad a city's vibe, the more generic it becomes.
The more unique and consistent a city's vibe, the more exotic and interesting it becomes.