Character background is what happens between levels one and six.
-- Gary Gygax
Got no reference, maybe he never said it, doesn't matter to me. I'm not like omg Gary said it so it must be awesome!!! Rather it succinctly nails how I think about sandbox campaign characters. [although I'd say one through four since 9th lvl is my high end] Who you are, where you're from, what you've done are not as important (or as interesting) as what are you gonna do next? We play the game to discover the answer to that question. The most interesting character's history is built in game.
Hmmmm, I like that "what are you gonna do?" Good definition/delineation/explanation of a sandbox/rulings/seat of pant DM to new players. DM's the guy/gal who asks you "What are you gonna do?" With the follow on implication that once you tell them, they then figure out what it means / how it works out.
Others I've recently added to my collection of quotes.
Booty may have different meanings in different places, but it's all the same to Conan.
Me early on: Whats the goal of the adventure? Why are we here?
Them: Gold, treasure, and to kill the minotaur king/Beastlord.
Me: Why are we killing him?
Them: Because he's the guy on the cover of the module!
In 4E you call out the name of your attack. In OD&D you call out the name of the henchmen who are throwing javelins. [is the proper quote according to muleabides]
In 4e its called Whirling Strike. In OD&D it's called my 5 henchmen attack. [what I posted originally]