The bidding process as dictated by the Bureau International des Expositions (BIE) is rather byzantine and sometimes compllicated. This is meant as a general outline to the bidding process.
About six to eight years previous to a proposed exposition, cities bid against each other for the right to host a world's fair. A city itself doesn't technically place the bid, but its national government places the bid on behalf of the city. Once the first city places an official bid for a specific year, a 6-month clock begins in which all other cities must place competing bids for that slot.
In the period between a bid and a vote by the BIE, cities will typically develop their bids by proposing a specific site, a specific theme, and plan as if it were to host the exposition.
On the day of the final decision for a slot, the various delegates of the BIE (one per member nation) vote for their preferred bids. If no city garners 50% of the vote, the lowest scoring city is removed from the ballot and the process is repeated until a city receives 50% of the vote.
Typically, nations proposing a bid for a specific city are members of the BIE. If a nation is not a member of the BIE, they may still propose a bid for a city, but that city must then receive 2/3rds of the votes in order to be chosen.
For more information about world's fairs and the bidding process, contact Urso Chappell.