It's not as hard as it's made out to be. I worked on a couple of MUDs back in the late 90s - early 00s, back when all of the cool kids were doing it. For laughs, I once whipped up a Diku clone in Visual Basic (pre-.NET era). But don't do that. Either find something that already exists (CircleMUD still holds up) or get ready to practice your C++/C# skills. You're probably wanting to do the latter, from your description, so I'm moving forward with that assumption.
First, you have to be a hundred kinds of motivated if you actually want it to turn out like anything. For an authentic "feel" we're talking about creating a Telnet server with a decent, consistent flow independent of the game clock, and presumably for multiple connections. Work in color codes while you're at it; you'll feel a lot more satisfied with yourself if you get that going from the outset.
Now, at this point, get used to the idea that you're just going to be making an extensive database and making your main engine do a few basic tricks with it. Do you like databases? Let's hope so. Make some decisions here on whether you want to plan and build your own structure from the ground up, or just use an existing database engine. I prefer to bake my own for various reasons, but that's just me. Either way, it's a bit of work, and you'll probably want to build your own tools to help interface with it. (Also: Do not use SQL. Just trust me on this.)
So you have a generally empty database at this point. You've almost certainly been plugging some test data into it, but that's not going to get you very far. Here's the part where you make CONTENT. You'll be doing a lot of writing. Probably a couple hundred hours worth in total before you're really happy with everything. Why? Because it's the only thing that the user can see. Also you'll be making interesting objects to stick in your little world; those are mostly only distinguished by their descriptions. Then Mobile OBjects (aka MOBs - ever wonder where that term came from?) and some interesting descriptions of their behavior. You'll probably want to enlist some friends or enthusiastic internet strangers for all the content you need, so make sure your tools are really user-friendly.
Oh yeah, you're maybe going to want to add some player classes, spells, skills, whatever your gimmick is. I hope you've been thinking about that a lot by this stage of the process. You'll be implementing and balancing all of that here. Then some basic messages ("You can't do that here" etc.) so that your players maintain some sense of pest and feedback about whether the things they're doing are actually working.
So yeah, basically just the usual game dev cycle, really, without quite as much helpful middleware or payoff when you're done. But you'll get a very nice feeling of self-satisfaction of it.
You'll probably get a lot out of reading old archives of rec.games.mud, if you have the time and interest.
