STEP 1: You will need an image of a building or a view looking down from above otherwise this technique will not work as well. Here I am using an image of Rochester Cathedral.
STEP 2: Open up your image in Photoshop and go to Image>Adjustments>Levels. The colours will need to look saturated and brighter than normal.
STEP 3: With the Levels dialog box open, experiment by moving the two outer-edged sliders in towerds the middle. This will alter the contrast of your image making it much bolder.
STEP 4: You will need to duplicate the original image by creating a new layer. Click on the background in the Layers palette. Holding onto this layer, drag it over the Create New Layer icon located at the bottom of the palette, next to the trashcan.
STEP 5: With the top layer highlighted, go to Filter>Blur>Gaussian Blur.
This will blur out the whole image but don't worry.
STEP 6: Choosing the correct pixel amount to blur your image will depend on the effect you want. I picked a blur of 10 pixels.
STEP 7: Now you need to add a mask to the blurred layer. Click on the Add Layer Mask icon at the bottom of the Layers palette (its the icon that looks like a grey square with a white circle in the middle) and select the Brush Tool. Choose a large, soft-edged brush set to 100% Opacity.
STEP 8: Click on the layer mask you have just created and paint on the building or subject you want in focus. Make sure your forground colour is set to black and your background set to white on your toolbar. Don't worry if you go over the building. Press the X button on your keyboard and paint over and it will go back to blurred again. That's the beauty of Layer Masks! :)
STEP 9: Continue to paint over the main building area. Don't worry about the edges, we will deal with that later with the Zoom tool. Just concentrate on getting the perspective you want. If you have cars or people in your image - you can paint over them too.
STEP 10: Now, Zoom into your image and make your brush smaller. With the foreground set to Black, begin to paint out the mask over the areas you want to remain sharp. Keep adjusting your brush size to get sharper edges around the building. Zoom in and out to see how your overall image looks.
STEP 11: If you make a mistake, simply switch the foreground colour to white and paint over the mistake and then switch back to Black to refine the edges.
STEP 12: Lower the opacity of your brush to 30% and continue to paint the areas around the building like the roads or cars or people.
STEP 13: If you want the background to be more blurred, duplicate the masked layer. Click on the image thumbnail on your newest layer and go to Filter>Blur>Gaussian. I used a radius of 18 pixels.
STEP 14: Now select a large soft brush again at 60% Opacity and paint into the mask, making sure the foreground is set to the colour Black. You want to paint the area around the building by making it look sharp and even more eye-catching, adding the toy town feel.
STEP 15: To create a more dramatic colour scheme, click the Add Adjustment Layer button (its the circle that is half black, half white) at the base of the Layers palatte and choose Levels. Again, drag the two outside sliders in towards the centre.
STEP 16: Once you are happy with the result, flatten your image, save your work and start to play around with the tones.