Please make sure that you have the "Erchius Mining Facility" quest completed before you proceed. A certain vendor is required to get the things you need.

Colonies are basically little settlements that anyone can make: It just takes time. Below are some screenshots of my colony:





With a colony, you can gain quick access to merchants, free things and more, all within your hands.
A good place to start is your house:


Here are the things you need for a house:
- A door
- Some source of light (Must have the description "Light Source"
- Walls, background and foreground that are manmade (Confirmed by me and others that they don't need to be manmade)
- A Colony Deed

To acquire colony deeds, go to Frogg Furnishing (located at the top of the first outpost you get to) and you can purchase them there for 750 pixels each.

There are multiple types of people you can acquire in a colony. This is a work in progress: As I find more people I will put them in here (or just tell me: Help out!)

Normal Person: Everything listed as above without extras, no special purposes
Merchant: Storage boxes, but not refridgerated.
Chef: (special thanks to vincent something something for this information) Kitchen related stuff
Person of a certain race: 3 or more of their furniture
Special: Talk to Frogg daily for some featured furniture; the type of furniture impacts who the special tenant will be. (If you don't want to wait 24 hours for some new furniture then (as suggested by @ventinarii83 roll the time on your computer clock to the next day.)
Mini-Biome (acquired from wiki: thanks to al sheepses for this): Find their ♥♥♥♥ in a mini-biome chest. Can be any of the default classes.
Dungeon: Find their ♥♥♥♥ in a dungeon. Only Normal Person. Excepting Lunar Base set, which can be Guard or merchant. Mainly human, guard will always be mechanic or soldier. (thanks again vincent)
Guard: Tiered furniture anyone? They will have increasingly better gear the higher tier you have their furniture. To spawn they need something related to weapons. (thanks once more vincent)
Other: Just looks different. Normal Person only.

Yes, the people in your colonies can give you quests! This is great as you can get reward bags and even let them join your ship if you do enough things for them. Here is a list of things they can give you:
Directions are west is left and east is right. It's pretty obvious. Also keep check of landmarks; they will tell you this too. Don't destroy them or else you won't be able to get quests!

Escort: Escort a person from a certain place to them. Rescued person will be a permanent resident.
Rescue: Kill a group of enemies, then escort the person. Rescued person will be a permanent resident.
MERCHANT ONLY: Trade: Series of quests that eventually unlock a new item in their store.
Gift: Series of quests that require you to get certain materials, put them together and give it to someone in the colony.
New friends: Acquire 3 pieces of furniture of a specific race and build a new house with those in it.
Assasinate: Kill a(n) [group of] enem(y)[ies]. A single enemy will be significantly more difficult to defeat than a group.
Item Display: Series of quests that will give their home a new look. (Must be a homeowner)
Pet: Damage and capture a specific monster. Instead of acquiring a reward bag, you will receive a random monster in a capture pod along with another capture pod. The captured monster will be a permanent pet of the resident.

All quests, once completed, you will receive a Reward Bag. These can range from anything to flares to even Manipulator Modules and Tech Cards and even legendary hats! (I'm not sure where the hell they get those.) I got an upgrade module from a reward bag once: daaaaaaaaayuummmm

If you do enough things for a normal person in your colony, they will suddenly change clothes to the Federation uniform! This means that they want to join your ship. They will also analyze objects and ask you about it. Some acquire weapons which means that if a monster SOMEHOW invades your settlement, they can take care of it! The type of class depends on what they are holding and/or the color of their uniform. At the start, your ship can only hold 2 crew members; upgrade it to get a higher maximum!

List of known classes (once again tell me if I missed anything!)
Soldier: Holding a gun. Good in armed combat. Red uniform.
Medic: Holding a medpack. Has a gun to defend themself; if at close range they have a dagger; if you are at low health they can give you a regeneration buff. Gray/grey (for you ♥♥♥♥♥ out there that still argue on how it's spelled) uniform.
Mechanic: Has a wrench. Sucks at combat, but if left on the ship periodically increases fuel maximum! Blue uniform.
Tailor: Holds nothing. Talk to them to change uniform to your current outfit or back again. Purple uniform. (Note: Firing a tailor after changing uniform will not revert the uniform, allowing you to get a free slot. You'll have to recruit another tailor to change it back, however)
Engineer (Acquired from wiki: special thanks to Al Sheepses for giving me the link) Holds nothing. Probably sucks at combat but if left on ship periodically reduces fuel needed to travel by 10% (2% if using a certain mod) Orange uniform.
Janitor: Holds a broom. Pretty much useless, but hey, be nice to them. Has lots of use as a merchant with better prices if using a certain mod. Brown uniform.
Outlaw: (acquired from wiki: once again al sheepses thanks) Acquired sometimes from a bandit leader surrendering; must have an Assasinate quest for this to happen. VERY good at armed combat, but seems to be ♥♥♥♥ at detecting when they're in danger (there's a guy literally damaging my outlaw, and he's just standing there shooting so often wtf) Black uniform.
Chemist: Holds a stimpack. The color of the stimpack changes the buff; orange for rage, yellow for glow, green for speed boost, blue for jump boost. Can defend themself. Yellow uniform.

Periodically, the Colony Deed in the person's home will switch to an image of a birthday present. Interact with the colony deed to call the person that owns the home over and they will give you a present. This can range from some pixels to a new weapon!

The amount of pixels/weapon tier depends on where they live. Here is the list of tiers:

Low: few pixels and tier 1 weapons
Moderate: some pixels and tier 2 weapons
Risky: pixels and tier 3 weapons
Dangerous: quite a few pixels and tier 4 weapons
Extreme: great amount of pixels and tier 5 weapons
Inconceiveable: lots of pixels and tier 6 weapons
Unknown (NOTE: unknown is tier 0 but is listed as tier 10 in the game files; hopefully this bug is fixed): ♥♥♥♥♥♥♥♥ of pixels and tier 10 weapons

Thanks for reading! If you have any suggestions please feel free to let me know in the comments. I hope this inspires you to build your own colony! Good luck!

Also beware that it can lag if you have too many people there. However, if you build a colony on Barren planets (planets that have pretty much absolutely nothing; useful for building and also making a giant colony) there will be no quests to rescue or kill people; only gift quests. There will also only be one quest to complete to get someone to join your crew, which means it can be worthwhile to find a barren planet.

Getting stupid questions in the comments so I'll put a FAQ here.

Q: hao du i plase wals

A: Right click. Dumbass.

Q: My character seems to have reset and I'm in the middle of nowhere! I have everything but all my planets are gone!

A: That happens sometimes when the game raises a false "new char" flag. Don't worry; all your planets are still there. There's a guide somewhere on the internet that will tell you how to get home.