I searched, but despite the term showing up  frequently there doesn't seem to be obvious practical instruction on how to do it. Or did I overlook it?

https://www.lesswrong.com/tag/world-modeling-techniques

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A model is a thing that gives predictions of what will happen.

For instance, your brain has an (implicit) model of physics, which it uses to predict what it will see when you toss a ball. Generally, the brain is believed to do some form of predictive modeling by pretty much all theories about the brain.

You can also form models explicitly, outside of your brain. If I look at median house prices every year in my area for the last five years, draw a line through the points, and predict next year's prices will continue to go up, that's a model too. It isn't very complex, and might be misleading, but that's a model.

Sometimes we make conceptual models that we know are false. I can think of someone as having two agents inside of them, for instance, one of wants to be healthy and the other of which wants to eat sugar. That might help me predict their actions over time -- even though at some level it isn't true. But it's good enough. A lot of models are like this.

Generally, in areas of the world you care about and want to understand, you want to get in the habit of asking yourself questions like "What do I think will happen?" "What could occur to make this thing not happen?" "Why did what I think would happen not happen?" and so on. In learning to answer these questions, you'll have to form models in your head. And in some spheres, you might find it useful to form explicit models using math and so on.