How does one set up a proper maptile?

How does one set up a proper maptile?

I was wondering as I just started working with Flare, and I would like to create custom levels, the problem is I have no idea how it works. Do I tell the code in pixels where an object starts and ends though image coordinates (I.E. something that's 33 pixels high x 20 pixels wide do I put down 33,20), or is it all one solid grid that I have to break?