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gorby
Now, that's a BIG question.
First you'll need a board of some kind. Some people use wood and some others use a picture frame (usually loads in charity shops at good prices). I usually use insulation board. The benefit of using insulation board is that it's easily carved and usually available free in a skip near you. 🙂
Then I often cover it in soil. You can buy diorama soil or alternately, real soil can be used as long as it's heat treated so to kill micro organisms. Mixed with diluted PVA glue it can be applied as a (very messy) paste to the surface which dries rock hard.
If you intend to use static grass it looks a lot more realistic if you use two or three different colours and lengths.
There are loads of items which can be bought or scratch-built to make dioramas more realistic, it all depends on how much work or money you are planning to devote to the project. More detailed advice depends a lot on the type of dio you are intending.

John Hughes
Alternately, there are premade dios which require minimal assembly and painting. They're a good option for a beginner.

Steven Van Dyck
Look for a picture of the real thing and then imagine how you could cut out a piece of diorama from that. Keep it small enough so the focus will stay on your model.

jaero
thank you guys for the help! i reckon i could go the foam dirt and oven approach, i will update this post as i go through making this diorama!

Kesa Tiho
As john said you can buy pre made dios, italeri makes great dios, accessories and minifigs for dios. Also a company called noch makes synthetic foliage and pre built trees, dios, figures, etc but the scale isnt listed. There are many more companies like tamiya that make stuff for dios but i dont want to go on a rant, rather id say you should trust what gorby says because hes been in model building for maybe twice my entire lifetime

jaero
i see, i might try italeri parts but use the advice from great sage gorby to sculpt the basis. thanks for all the tips and info!