I always use real people and horses for the models for my illustrations. I usually give the manuscript to the models so they can become familiar with their character in the story and can "act out" the part they are playing when I take the photos. I do take lots and lots of pictures and pick the best ones to work from for the illustrations, which are done with graphite pencils of various degrees of hardness.
Bell's Star is a Morgan and her story takes place in 1850 in Vermont. She and her owner help a runaway slave girl escape to Canada. Here are some reference photos and the illustrations of some of the scenes in the story. I had period costumes made for the models.
Here is the illustration for the back cover of Bell's Star.