Lower courts do not have the authority to make judge-made law. Only judges operating in appellate and other high courts are able to set legal precedents by either changing the way the courts interpret a law, or offering a new interpretation that expands an existing law. Judges cannot invent laws out of whole cloth; they must be able to provide clear legal rationales for their decisions, with supporting information in the form of decisions in single cases.
After a judge-made law is created, other courts are bound to uphold the law, or to support challenges to it. As other courts abide by the law, they reinforce it and create a body of case law to support the original judge's interpretation of a legal situation. If a challenge is filed in another court, the other judge can choose to overturn the decision, negating the judge-made law, or uphold it, leaving the law in place.
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