I've been thinking a fair bit about backstories lately because I just started playing a D&D 3.5 campaign on a bimonthly basis with a group composed of two published authors (one is me), the former editor of a literary magazine, a librarian, and a video game writer, all people who as you might imagine have strong connections to literature. The game is strongly focused on narrative development, driven by proactive character decision making, and is in a way the best possible version of what something like AD&D 2nd edition and the whole "silver age" of RPGs aspired for.
We had a couple of months of prep between when we first sat down as a group to discuss potentially playing a campaign together and when we held our first session (a few weeks ago). Part of the prep included a questionnaire about our characters for us to fill out, and I basically ended up writing 5400 words of backstory for my character. I became the very "12-page backstory" guy that I've mocked in the past. While the referee of this campaign encouraged that and loved the backstory, as a referee I find the prospect of close reading, annotating and then summarising sixty-odd pages of half-complete amateur narrative dreadful.
In Necrocarcerus, PCs begin without backstories or histories, and they get them by finding and consuming "nepenthe", a distillate produced from brain juice that contains their memories from when they were alive. You can, of course, drink someone else's nepenthe and get their memories and thus their "backstory". On a related note, "experience points" from slaying monsters were also obtained by drinking their brain juice, which was essentially an undistilled version of the same fluid. I did this because Necrocarcerus is partially a parody of the tropes of Dungeons and Dragons, and I wanted to riff off the joke that PCs are often "murderhobos" lacking a backstory situating them in the world.
When we encounter "backstory" in narratives, it is almost always in the form of a narration delivered by a character during the actual story. It's backstory because it's a supplement to the narrative that precedes it and clarifies it, but the events of it are already completed. Authors have all sorts of clever tricks for introducing this material - characters in ancient epics brag about their past deeds as a prelude to boasting about their future accomplishments, while intellectuals in experimental novels cite one another's fake books, and detectives in noir novels muse about their past cases. In fact, the most derided way of presenting this material is probably the form most backstories actually take - supplementary, secondary documents that don't take into account the main narrative they're meant to be supplements for.
So getting away from that, I'm interested in a backstory system for use in my games that does a couple of things. I want backstories that are presented diegetically in the game, that are optional but that do reward players who come up with them, and that have different levels of player agency involved in generating them.
In Into the Depths, almost everything one can do is represented by a piece of gear, so here's some gear that ties into generating backstories.
Diary / Journal - Once per expedition you go on with a journal, you can choose to be Good At something. You must tell everyone an anecdote from your journal about why you're Good At this thing. This lasts for the rest of the expedition. If you lose your diary, leave it behind in town while you go on an expedition, etc. then an embarrassing anecdote gets out as someone takes the opportunity to peek inside. You lose your Good At and gain a permanent Bad At. If you make up the embarrassing anecdote, you get to pick the Bad At, if the referee has to, they get to pick what you're Bad At.
S'mores - When you camp with a fire and someone has s'mores in their gear, each PC who wishes may tell one anecdote about their character's life prior to play, and in exchange, they become Good At one thing related to the anecdote. Anecdotes need not be true. This effect lasts until they use the Good At once, at which time it fades. One can only receive a benefit from one s'mores at a time.
Self-Published Memoir - Cost to have it printed is calculated based on its actual title, which must include at least one colon and two adjectives. Carrying a copy of your self-published memoir allows you reroll a save whenever you can relate an anecdote about your past that explains your resilience. "Inspiring" anecdotes grant an additional +1 on the reroll.
Lucky Charm - You can only have one lucky charm active at a time. You must explain why it is lucky for your character. It grants a +1 to one kind of roll (same scope as Good Ats). If you ever lose it, you have -1 to that kind of roll until you recover or replace it.