WHAT IS IT?
Scenarios are narrative stories that provide detailed information about any given process in context of its use. They are used to understand the breadth of interactions, rather than the detailed steps in a process. They will cover all the variations of how users interact with the system providing a holistic view of the design.
WHO USES IT?
Scenarios are used to understand how users intend to interact with the design. Therefore, scenarios are very effective at communicating to development and business teams how users are expected to interact with the systems.
HOW ARE THEY MADE?
Scenarios are used in conjunction with Personas and tell the story of how the persona interacts with the system. Consequently, creating a scenario is similar to method acting, in which you place yourself in the role of the persona and write the story of how that persona interacts with the design. The goal is to cover as much breadth as possible in the scenario so that you can understand the scope of the design without getting bogged down in the details of individual steps. Remember the goal is to tell the story of User Experience through the eyes of the persona.