One of the things that I think bypasses a lot of people is just how much openness can intimidate, concern, or otherwise slowdown a player when making a character. I have several players in games I run who do better with more focused character creation than other games.
For example, put one player in L5R or D&D and they'll have an idea for what they want to play rather quickly. They'll pick their clan/school or race/class and have the rest built around it rather quick and in vivid detail. Drop them into a system like GURPs or FATE where you can literally build anything - or even something as open as 7th Sea where you choose backgrounds but otherwise are free to make what you want, and the creative process stops.
It's not about creativity so much as it is about guidelines - or so I think - and how that works. I found it in myself this weekend while working on making a new character for the D&D game that I'm in. I've opted for a wizard, but wizards have nothing but options. They have a ton of options in class, and then even more in spells. Frankly it was overwhelming. Except, if I focused on a concept it became easier.
The notion that knowing what you're building around makes it easier to build is hardly shocking, but if you can see why a solid concept makes building a character easier, it isn't hard to extend that to having guidelines for how things work help choosing or building a character entirely.
In D&D when you choose a class you effectively choose how you will be interacting with the game mechanically. If you choose a fighter, you're going to attack things with weapons and armor. If you choose a cleric, you're going to interact with a certain selection of spells. The same is true in L5R where choosing a school determines your primary interaction with the game, and clan does much to choose how you view the empire.
However, these guidelines in FATE don't exist. Furthermore, combat being reduced to one skill and not being any more or less impactful than any other skill and even more options present themselves. How do you choose how to interact with the world when everything is more or less equal and you have no guidelines?
If you already have a solid idea it's easy. However, if you're grasping for an idea - and let's be honest most of us are most times we come to the table, not having a limit to the options before you can be overhwhelming.
So what is the solution?
The answer is above. The more you know, the more you define, the more options you cut out of contention and the easier to decide it can become. Kind of like how asking "what do you want to eat?" may get an I don't know, while asking "Do you want burgers or pizza" will get a real one. The options are limited, the real weight of the choice is gone, and so the person is free to choose.
Which means if you find yourself stuck or frozen with choices, the answer is to talk to your GM. Ask about the game. Ask about what will happen in the game. Ask about what the PCs will be doing in the game. Define the game. Define how the GM wants it played. Cut out options, and pick from what is left.
And don't fret if you get overwhelmed. It just means you need to narrow your view even more.