So I've read statements saying that character *is* plot. The people who make these statements often go on to say that the characters "tell them" what to do in the story.
And then I've read some statements who claim that this is complete and utter drivel. They add that you have to think about plot structure, and how your story needs to follow certain guidelines, not go on some subconscious whim that writers claim are characters "speaking" to them.
Okay, so that's a valid point, but I'm still going to argue the case that character is plot. I fall under the category of the first lot of writers, rather than the second.
Because, well, character IS plot. We no longer read stories where stuff happens to the character and they just react instead of act (did we ever?). Stuff will happen to the character at first, sure, but what the character then chooses to do is based purely on who the character is. Say a plague hits your fictional town. Depending on your protagonist, your book could go any way. For example, the story could start off with the protagonist's reaction to the plague, where he or she could -
1. Run for the hills and try to hide
2. Set out on an adventure to discover what caused the plague
3. Do scientific research to discover what caused the plague.
4. Tend to the sick
So right there, your plot is decided for you by who your character is.
Now. I am definitely, definitely an advocate of knowing plot structure. You can't just meander around the pages with nothing happening for the majority of the book while your character chooses their own adventure. A writer needs to know the bones of the plot. But the meaty part, the ups and downs of the story, are up to the characters.
How I figure out the beginnings of my stories, step-by-step, looks like this:
1. Create main characters and antagonists - this means giving them histories, desires, motivations, etc.
2. Figure out the story goal and ending (1 and 2 are interchangable, but I usually do them in this order).
3. Start the story off with an inciting incident, and while I'm doing that...
4. Work out the first doorway (see James Scott Bell's proper explanation for this phrase in Plot and Structure). I need to know what's going to force my protagonist into the story and give them no way to turn back.
5. Lead my character to the first doorway, so they can begin the story goal.
Now, from here on in is the tricky part, and this is where character really becomes the plot. What happens next is a choice depending on who the character is. Your character(s) will decide how to overcome this no-turning-back thing (usually it's with resistance at first), and take certain steps to try and get where they want to be (usually the status quo - back to how they were at the beginning of the story, although they never get there).
Do they try to eliminate the threat on their own? Do they enlist help? Does the antagonist have a certain style while trying to keep the protagonist from reaching his/her goal? Because, yes, the antagonist is also the plot. And all these plot choices rely on character.
Of course, while planning all this, I know that I need to lead my characters through doorway two and reach the climax, so I know the basic direction, but how the story gets there is up to the characters.
And that's what we authors mean when we say our characters "tell us" what to do.