Step 1: Outline
Mark the rough outline of the pond. You can use a garden hose, spray paint, wooden stakes or anything else that will show you roughly where to dig.
Step 2: Digging
Start digging 6 inches inside the marked area to start. Remove all of the loose dirt as you go. Be mindful of the depth. You don't want to over dig.
Step 3: Edging
Once the bulk of the dirt is removed it's time to start the edging work. Make straight shovel cuts in the dirt as you go. All edges should be nice and sharp. You want the bottom to be as flat as possible and the sides as vertical as possible. Continue to remove all of the loose dirt.
Step 4: Leveling
Use a level to check the height of the edges all the way around. Even a small height difference will be very noticeable once the pond is full of water.
Step 5: Placement
After you are satisfied with the dirt work it is time to install the liner. Stretch the liner into the hole and roughly tuck it in.
Step 6: Water
The best way to form the liner to the dirt is to use the weight of the water. As you start filling the pond pull the wrinkles out as best you can. Once there are a few inches of water you won't be able to move the liner. Try and work the many wrinkles into just a few large folds.
Step 7: Verify
Once the pond is mostly full you can inspect your handy work. If there is a big difference in the water level of one side vs another or you have less than 6 inches of extra liner, you need to redo the work. This can be very frustrating but if you don't do anything about it you'll just end up with more problems down the road. Drain the water from the pond, pull out the liner, and fix the problems.
Step 8: Cutting
After the water level is 6 inches from the top, remove the hose and cut off the excess liner. You want to leave about 6 inches of overlap all the way around.
Step 9: Rock
It's time to stack the rock. If you are going to cover the bottom and sides with rock, start in the middle and work your way out. If you are leaving bare liner, start placing at the edge and work your way around. Make sure that the rocks are stable where they are placed. You should not be able to shift the rocks. If they wobble, shift them until they don't or if you must, find a different rock for the spot.
Step 10: Turn It On!