Q:

Selection of toilet area, its distance from the trail, its size with respect to number of people in group, placement of holes

I have gone through the answers of question When is it not OK to leave feces behind?
It did answer a part of my question "I would really like to know how and where exactly do I select this area?"
It also put an insight on "How far away from trail in wilderness should it be?"
I am new to hiking. So far I have been on about 15 different day hikes. I am planning to go on a multi-day hike soon. I would need to set up a toilet area in this case. I have read in posts and books that "toilet area" must be away from a water source, that "toilet area" must be lower than cooking area, etc. 
I am not exactly able to picture it as I haven't done it before. Which raised more questions
I would really like to know how and where exactly do I select this area?
What its size should be with respect to number of people who are going to use it?
How far should two toilet holes should be from each other?
How approximately far away from trail and the campsite should it be?

A:

The two thoughts are correct.
The other considerations should be:

The layout should ought to be like Trail - Campsite and Kitchen area - Thickets (if there are any) - Toilet area. Preferably it can be a triangle. So that one doesn't have to pass through kitchen area to go to toilet area. 
"It should be lower than the Kitchen area, water source and campsite" - Correct.
"It should be away from water source" - Correct.
If the lower and higher plane topography is not available, then you can see for wind direction for the most of the time of the day. At least in the early hours of day Wind Direction should be towards toilet area and hence away from kitchen/campsite. 
Never set up a toilet area in thickets, and or tree cover. If the soil is damp, it takes a little more time to decompose the waste naturally. There should be proper sunlight over the toilet area, it helps decomposition faster and keeps the flies away. 
The distance between campsite and toilet area should rather depend upon terrain and the site. If we are dealing with a flat plane without much variation in topography, I would prefer it to be at least a 5-6 minute walk from the campsite, which should roughly be 300 meters?
The area shouldn't matter much if you follow the next step I suggest. 
Additionally, I hope you have been trained to dig a small hole, do your work in. I have known people who usually fill the hole with the soil and put a stone over it, which I really don't quite comprehend why. May be thats their way of letting the other camp member know that he/she shouldn't dig there. As long as everyone is filling the hole, and marking it, that should never be an issue. Comfortable distance should be roughly a couple of feet from an existing mark. How to mark depends on where you are. Pile 2 stones one over another, if there are dry leave, you can put them over the hole as an intentional bunch of leaves. The region I trek in is mostly Dry deciduous forest for most of the times, and I usually do not trek with a large number of people with me, so I just get away digging a whole, doing my stuff, filling it up again and put some leave over it.

A:

What its size should be with respect to number of people who are going to use it?
I've found that you can dig one cathole and use it multiple times,(by the same person or multiple people), just dig a deeper hole (deeper but not wider). After each use, toss down a thin layer of dirt to "hide" the waste from other creatures. If it is attracting flies, then you should use more dirt. Caution: Cordon the immediate area with a rope or tarp to prevent people or animals from stepping in the open hole. Be sure to completely fill in the hole before moving your campsite.
How far should two toilet holes should be from each other?
Doesn't matter. When one hole is nearly full, finish filling it with dirt, put a rock or boulder on it to mark the spot so you don't dig there again, and dig another hole 4 or 5 feet away to start over. If you want multiple holes at one time, then your biggest concern will probably be privacy.

