One of the five main techniques for producing a quality paint job on a miniature figure. The others being:
1) Preparation: After removing your brand new mini from its package, examine it for flash. Flash is lead/pewter that has leaked into the seams of the mold and obscured the edge of the model. Trim this excess metal with a sharp hobby knife (eg. X-acto), taking care not to ruin the original finish. After all the flash is trimmed, wash the model. It seems strange, but trust me. The molds used to pour lead miniatures are lined with chemicals that allow for easy release upon opening. Washing this off with some hand soap helps the paint stick to the model.
2) Basecoating: Choose the basic colors of the model and apply them to the metal, paying close attention to the borders between colors. I use water based acrylics because they mix well, don't cost much, and are easy to remove if you screw up. Be careful not to use too much paint at this stage. The paint should be thin enough to settle into the small details of the model without obscuring them. If you find that the paint is not flowing nicely off the brush, rinse it off and start over. Try not to brush over the same area twice, because this will smear the now drying paint around.
Now you should have a model is primary colors, not a lot of detail.
3) Shading or Inking: Taking into consideration that the deeper areas of the model would be a darker shade, you now apply that color to the whole area of the color. If you have an area of blue, you should now paint a layer of darker blue ink. This adds depth to the color. Areas that are recessed will have more ink. You can also get an inking/shading effect with thinned out paint. Try out different combinations for different effects. Yellow looks good with both deep yellow and light orange shading.
4) Drybrushing: As described above, this is the application of thin, nearly dry paint to the raised areas of the model. A drybrushing will add the illusion of height and increase the depth of the shading. One hint for dry brushers - it will ruin a brush fairly quickly. The ends will fan out to all angles. Save your older, larger brushes for drybrushing.
5) Fine detail: Now that your 3 step coloring is done, you can go in and add the small details like pupils in eyes and buckles on belts.
That is how I do it. Your results may vary.