It's done on system clock.
You can rename the defaults. The game ignores the custom characters, or you can use the Character Creator
wait, what character creator?
from the FAQ thread
Is there a character creator?
Sadly not. The Keep will attempt to recognize your Wardens and Hawkes from previous playthroughs so they can be reflected as part of your history, but you won’t be able to edit appearances or customize new characters
Also the renaming is nice, I hadn't noticed it, but that then limits you to (as far as new characters go) one of each class/gender/race combos. . . which is still a lot but based on the way I play these games to death
it's a bit more restricting.
That said, it's better than the open internet ports on my Xbox360 (to my knowledge not a possible things) advice given to me by @dragonage on twitter.
still it would be nice to know if the lack of servers in the 1st two games is permanent or just a symptom of something temporary. I've always had some trouble connecting to the servers and many of my characters never uploaded in the first place but not like i'm having now, and they worked in august when I played the first two the last time.