I am planning on converting a part of my un used layout into a diarama. What I am looking for is if there is any criteria for this type of layout, like size,scenery,structures etc. Any help appreciated.
Welcome to the forum. Your first few posts are moderated, so it will take a while before they appear (particularly over the weekend, which is a shame, because that's when many newcomers first post).
A diorama can be anything that looks good to your eye. Locale, era, structures, etc. are totally up to you.
Most dioramas have a backdrop of some sort, but not always. This could be a sky blue backboard, structure flats, photo, etc.
Good luck with your project.
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Dioramas are meant for display and for photography. They, usually, get your 'best' work. At least, that's how I have oriented myself to them. They are a mini-layout, but because you are involving all of your skills and confining them to a small space, dioramas should stand out. They don't always, of course, but most of us have that orientation to their construction.
I use natural backgrounds and use them outdoors. Natural lighting is almost certain to be better than anything most of us can afford to bring to our craft indoors. Similarly, natural backgrounds trump what we can create. If one is a skilled painter, by all means, create a backdrop and use it all indoors. Michael Cawdrey comes to mind (google that name, and some long-timers here will instantly recall his work).
I urge you to think about this, consider dimensions, think about your ultimate goal for this project, and then take your time. I built the one below inside of a few hours, but I didn't need to make a backdrop because the surrounding mountains did the job for me. If you need trees, brush, roadways...that's going to take some thought and some time.
Enjoy!