A campaign is a group of adventures, sometimes analogous to a season in a TV series, other times equivalent to the entire series. A campaign traditionally follows the adventures of a group of Player Characters (PCs). Usually the campaign starts with the characters’ first adventure together, and sometimes takes them right to their last. In one campaign I ran under the AD&D™ rules, the PCs started out as brash young first-level bravoes tackling their first adventure together under the sponsorship of a small frontier Baron who was recruiting adventurers to clear out non-humans who were raiding the borders of his territory. Twelve real-world years later, the characters (now ranging from 18th to 23rd level) had their last adventure together as the Gods called them up to fight in Ragnarok.
Other campaigns are of a more limited scope. A Game Master (GM) might have an idea for something which would be a fun diversion for a few weeks or months. A series of adventures lead the PCs along the trail till they achieve the end the GM has in mind. Then the campaign ends.
The former is the kind of campaign that equates to the full run of a TV series: many seasons, with the characters developing and growing all the time. The latter is like one season of a TV series. If they enjoyed it, the players might try to persuade the GM to return to the setting and let them enjoy further adventures – the fans calling for a return of an ‘axed’ series. Perhaps she will go with popular demand, perhaps she has no vision of where the characters might go next and refuse – it’s up to the GM.
The first thing to decide about the campaign setting is what genre it should be. The most popular genres in role-playing games are listed in the Genre page of this wiki, but that doesn’t cover them all. At the time of writing this it doesn’t mention Atomic Horror (the world depicted in 1950s B-movies), film noir detectives, cartoons (as depicted in the RPG Toon!™), anthropomorphism (Fuzzy Pirates™, GURPS Bunnies & Burrows™), kung-fu movies (Hong Kong Action Theatre™), and probably several more which don’t come to mind immediately. Usually, the genre is dictated by the idea for the campaign the GM has just had: if he wants to follow the plot of a book which has just inspired him, the genre of the book will dictate the genre of the campaign.
That’s not always true, though: you might wonder how a plot you’ve read in one genre would translate to another, and that could be the basis of your campaign. It’s akin to the development of The Magnificent Seven from The Seven Samurai: a masterpiece in one genre inspiring a classic in another.
Once the genre is decided, the GM needs to settle on the campaign setting.
Every campaign has a setting in which it takes place. This might be anything from an official setting from Steve Jackson Games (such as the Infinite Worlds or Yrth settings), through some non-GURPS setting from another publisher, to a loosely defined ad-hoc setting such as 'real life but with magic'. It is up to the GM to decide which setting to use, and to what extent it should be customised.
Even if the campaign is based in an official setting, the GM is not ‘wrong’ to change details to suit the way they like to run the game. Your version of a setting only needs to be the same as the official version if you are writing something for publication. In the privacy of your games room, you are expected to change it any way you like.
The advantage of an official, published setting is that a lot of the GM’s work is done for you. You can pull out maps, price lists, job salaries and status, lists of the countries of the world (or the planets of the galaxy, or the streets of the city) and write-ups about their rulers. The disadvantage is that sometime it loses the atmosphere that you are looking for. If you want a world where humans are a persecuted minority, fighting to survive on the edge, the average humano-centric published setting will not give you that.
One key feature of GURPS is its universality: you can use the rules to adventure in any setting the GM likes. If it is not a GURPS product, it will require more work to adapt the world as published to the way you intend the players to experience it, but that also means that the world works the way you want it to.
The full details of the setting do not need to be settled before you can start to play the campaign. You may start a campaign set in the Second World War, for example, beginning with the PCs in the British Army during May 1940, about to encounter blitzkrieg for the first time. You don’t yet need to know the name of the commander of the Eighth Army in Egypt, even though you know that the PCs will eventually be posted there. Those details can be researched later – just make sure you have enough knowledge to answer all the players’ questions about the situation they are in now.
Looking at the genre and the setting tells you what options are open to the character. You may choose to use character templates (from the GURPS Basic Set p.258 onwards or a world-book) or not, but you as GM should always brief the players about the kind of characters which would be appropriate for the campaign.
As well as the demands of the setting, campaigns have Point Totals and other options which determine the power level of the PCs, such as which traits are allowed in the campaign. It is up to the GM to set and explain these limits. They might be defined by the campaign setting if you are using an official setting unmodified. If, in your opinion, some advantages, disadvantages, and skills might fit especially well in the campaign (such as Driving (Automobile) in a modern-day setting), a list of them should be provided so that players don’t overlook the obvious when constructing their characters. Forbidden or inappropriate advantages, disadvantages and skills should also be listed: if the campaign is set in May 1940, you will probably rule that no British soldier of the time would have the disadvantages Fat or G-intolerance.