First, pick a theme for your display. Scour you local dollar stores and craft shops for bargains and interesting items to put in your display. They do not all have to be to the same scale, this is a fantasy display, not a scale model. Plan on some type of movement in the display to add interest and captivate your audience.
For our holiday display we choose to do a typical Christmas Village with a Trolley going through it .
For The Trolley, I used an O-gauge Christmas Trolley Set from MTH Trains. This is my first O-Gauge set, and you can read more about it at TheHobbyGuy
Our holiday display is in the bow window in our living room. If you don't have a bay or bow window, you can do this on a shelf, a mantle, or a table.
I set the Trolley up first to make sure it would fit, and because I just wanted to play. The set included a circle of track, however, I laid out the track in a serpentine. This will make the trolley wind through the display and give visual interest from different angles.