Colloquially known as "the director's homework," this is the process of studying what is inside the script, i.e. analysis, along with studying what is outside the script, i.e. research. There are many ways to accomplish this essential task, but the most basic documents that combine both analysis and research is the script analysis and style analysis.
Of course, there are additional analysis tools depending on the type of script and focus of the design, but one that I especially enjoy creating are French Scene Charts to track entrances or exits of characters. This is also helpful when stage managing a play as it helpful to the actors and design team, especially the costume and lighting designer (scene shift plots are also a must when stage managing, but I digress...).
I also frequently create relationship charts for myself so that I can be sure each characters intentions relate back to the seed of the show, which in turn reflect upon the theme. Then I can break the script down into units along with further descriptions for musical numbers.
Research can take many shapes, but a handy visual option is a customized google map, be it in a rural or urban setting. A Gloss can also help define and clarify terms. Of course, good old books are part and parcel of research, usually in the form of reading other plays by the playwright or as visual or textual research of the time period.
All this work culminates in my Core Action Statement which attempts to synthesize all previous research and analysis. I would communicate only the central image to the design team, and use the rest of the core action statement to answer questions with power words from the larger summary. It is critically important that this statement be a springboard for designer input, not a dictation of what will be, so brevity and selectivity is key here.
After subsequent production meetings, casting, first read throughs, and character physicalizations I may preblock scenes. The extent to which I preblock is largely dependent on three factors: the size of the cast, the experience of the actors, and the amount of rehearsal time. However, my rule of thumb is to preblock and then discard in the face of more organic or exciting developments from myself or the actors in the moment.
Of course every production is unique, so for every show my process requries flexibility and responsiveness to the individual circumstances of each play. But that's what keeps the process so fresh and enjoyable, and why I keep coming back for more!