Game Design

Game design is the process of designing the content and rules of a game. The term is also used to describe both the game design embodied in an actual game as well as documentation that describes such a design.

Design method

A document which describes a game's design may be used during development (often called a design document), although this is not the only way to design a game. Many games have been developed primarily through iterative prototyping which, depending on the type of game, can be a more appropriate way of discovering new designs than theorizing on paper. This was particularly true of early video games where the programmer was often also the designer and designs were much more constrained by technology, while at the same time new and ingenious programming techniques were being devised in parallel with the game design itself. In practice, some combination of forward planning and iterative design is used in the development of a game.
Iterative design tends to be more suitable for core game mechanics (or gameplay) where the emergent properties of the design can be very hard to predict.
On the other hand, game elements such as story, setting, logical flow and level designs often lend themselves to being designed on paper, although almost invariably some unforeseen issues will arise that will need to be dealt with through a modification of the paper design. Thus, even a design document can and usually does undergo some kind of iterative process during the development of a game, either formally or informally.

http://en.wikipedia.org/wiki/Game_design