The first step is installing an empty world.
You could also use this guide if you play with story progression, but want a custom world filled with your own Sims.
In this guide, I use a premade empty world and populate it with Sims for rotational gameplay. This is NOT a tutorial on using Create-a-World (CAW).
This is how I setup a custom world in The Sims 3, starting from scratch and building up my world from nothing (similar to my Sims 2 method).