Most video games are built with a top-down design. Everything in the game descends from the designers, all the quests, all the dungeons, all the loot was hand-crafted by a developer and put in the world for players to ram themselves into until something breaks and the bars fill up. The players are very much not involved in creating the world or even affecting it all. The dungeon is the same for everyone, all the time, no matter what happened in there yesterday. EVE Online takes a different approach, one where the dev team gives the players the resources to create their own content by making their own stories across the face of the game. Check out this interview describing how EVE Online works to design from the bottom up. Gamasutra has the story.
The danger is that when something doesn’t work, when the players reject whatever design you’ve given them to play with, the result isn’t apathy. It’s a riot. EVE Online learned this lesson in full after releasing an expansion that was essentially an insult to the entire player base. After the layoffs and reorg, the EVE developers have become a little more sensitive to player concerns.