Note: This excerpt will be specifically addressing BIP39 recovery phrases.
Can I Pick Any Words?
You might be wondering if you can pick your own words in your recovery phrase.
The words in your recovery phrase come from a specific wordlist known as the BIP39 wordlist consisting of 2048 words.
Can I Choose My Recovery Phrase?
Now you're thinking, "That's a lot of words! Can I pick the words for my recovery phrase from that list?"
Sort of..but it's not recommended
Humans are terrible at randomization. We look for patterns in everything (even when we're not trying to). It is an innate survival technique ingrained in our brains to prevent an overload of information. Someone else can and will uncover that pattern along with your coins.
"But you said, sort of, what does that mean?!"
How Do I Do It Then?!
You can't just pick any 12 or 24 words in the BIP39 wordlist and call it a valid wallet. There are "rules" beyond the wordlist to a recovery phrase.
Try it yourself. Pick 12 words and recover a wallet. The device you're using will probably give you an error. (If it doesn't, your wallet software probably allows invalid recovery phrases. Don't send anything to it.)
You can create a random number (and by this we don't mean pick a number between 1-10; we mean a really really long number NOT from your brain) and generate a recovery phrase. But, that's probably not what you're looking for.
"So what are these rules?"
The last word of a recovery phrase must be a very specific word. This word is called a "checksum". Without going into technical jargon, it is something your wallet software uses to check if the rest of the words are following the "rules".
There are ways to figure out the last word but honestly, they are all cumbersome, require a solid technical understanding, and overall are not worth it. It's beyond this post and we're not trying to promote it either.
So to be blunt on whether you can pick and choose the words in your recovery phrase:
You can; it's complicated; don't do it. Let your wallet software generate a wallet and recovery phrase for you. It's much easier and frankly, more secure.