Shift does nothing for the miniature effect, though it may help with a particular composition.

Tilt does the work, by simulating a much smaller depth of field. For this you need a relatively "flat" subject, e.g. the ground as seen from an elevated position. This is so the parts of the ground in front and behind the focal plane are thrown out of focus more than they would be with a conventional lens.

If you were to try and get the effect with a non flat subject, like corridor, it would not work at all, as the floor would appear to have a shrunk depth of field, as would the ceiling, but in focus part of the ceiling would be at entirely the wrong distance from camera, as the focal plane is tilted over. And the walls would look funny too as the area in focus would run diagonally.

Getting high up helps a lot, and ensures your scene is more like the flat example. If you are low down in a built up area, the buildings become the walls, and the sky becomes the ceiling of the corridor and the effect is ruined.

In almost all cases you want to have the tilt axis horizontal in the final image (so if it's a landscape shot tilt should be about the horizontal axis of the camera).

The shift axis should be aligned with the tilt. This is because you may also want to shift minimise the amount of sky/avoid having the horizon in the image.

Including the horizon doesn't alter the effect, though it is a dead giveaway that it is a fake miniature not a real macro shot (when was the last model railway you saw that stretched all the way to the horizon?)

The amount of tilt depends on taste. Obviously if there is very little tilt you wont get the apparent reduction in depth of field. If there is too much, there wont be enough in focus to make a coherent image.

The only thing I would say for tilting and focusing is that you should pick out a subject, one person or object and make sure the focus plane intersects that point.