Apparently in some of the novels, Type 103 Tardises can manifest as senient, people-shaped time machines (the Doctor has a Type 40). It kind of reminds me of the Hitchhiker's Guide to the Galaxy Mk 2, which manifests itself not as a book, but as a time-traveling, parallel-universe-crossing raven.
The "mind" of the Type 40 Tardis could be a reflection of the time lord's mind, or something manufactured as by computer technology or genetic engineering. I don't think the Tardis was meant to be sentient in the original series, because the Doctor is pretty rough with it. He sometimes talks to the "old girl", but he also talked to his car and gave it a name (Bessie).
I imagine the manufacturing process as mostly mechanical, even though in Journey's End the Doctor gave his meta-crisis duplicate a chunk of Tardis coral that he could apparently use to grow a new Tardis. In the 4th doctor episode "The Invasion of Time", the Tardis is represented as having a huge, city-sized interior, with secondary power stations, art galleries, warehouses, swimming pools, and miles and miles of corridors. I figure that those parts of the Tardis are either scooped up out of reality, or copied from reality, rather than generated by software.