As I already mentioned in the comment, I can't give any instruction on how to make an item, because I think it depends on our talents. Each of us have different talents, some are good in drawing. All spriters I know are really good in drawing - Lupus Aurelius whose graphics can be found among different contests, you may know his skills since he is also the creator of TibiaQA banner. Li Dao in interview wrote, that he's a freelancer graphician. Not to mention that spriters famous on DeviantArt are students at Art Universities.
Why it is so important? Because you need imagination. You need to know what item you can close in 32x32 pixels, and what is impossible to present in such small resolution. I often ask friends about they ideas when I am looking for inspirations. They have got dozens of funny and nice ideas, but none would work in this size. Using different color combinations, shading correctly, patience - it's all a strong sides of people who are skilled in drawing.
Patience! I think that really good and skilled spriters who works on a professional graphics programs makes their work quite fast (only few hours haha), but for example to make a sprite I can spend dozens of hours xD Patience is also necessary when your first creations won't be good. Because we all are learing, sprite by sprite, drawing by drawing we getting skills, which is visible.
It was my first sprite in my life xD As I remember I made it in 2014. And these are my recent sprites, Jaunary 2020:
What more comes to my mind is that you need to do it, because you like it. Not only because you want to win. No, no,no... that's a bad intentions. It causes situation that during contests appear plagiarisms, not a good sprites, or people simply make 548969 2/10 sprites, not only one but 10/10.
All of spriters has their own "instruction" on how to start, which is the result of their experience. To make a good sprite you need to try, try many times to gain this experience.
Okay, lets go to some technical aspects, which should be obvious but I noticed that still so many participants forget about it.
Dark outlines:
...and I have no idea why rules says it should be black.
Few years ago official rules for fansite items were slightly different. We were obligated to put each slide separately in a row (vertical or horizontal), make a background in the color, which is not used in the sprite and outlines should be "dark". Patricipants added GIFs just to show the animation working, as an additional image. We had to write the exposure times to be sure it will work as it's designed. Maybe it caused some misunderstandings and now rules say that participant is obligated to make a GIF with transparent background and outlines should be "black". No, absolutely not. It's enough to fits Tibia if it is dark. Look at my ring above, it has dark blue outline, while Cupid has brown. It makes sprites look better. Effects like flames, electric sparks etc. may have no outlines!
Item must fits to the Tibia, while a lot of participants presents sprites that represents their own style. Sprites might be really good, but if it doesn't fit to the game, then it has no chance to win. Here we must remember that we don't do this sprites for ourselves, but for Tibia/fansite admins. More important is to meet their requirements.
Making a GIF: I noticed that some participants makes a nice sprite which doesn't work smoothly. It's nice to use a good GIF maker with different exposure times for individual slides. I use ezgif for years. Photoshop probably got this option in it's tools.