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Landscaping on steep slopes and hillsides can be quite a challenge for most homeowners. Besides how appealing the yard or garden looks, errosion and water saturation issues with plants are generally the main concerns with most landscapes on steep grades.
While it's not an issue on all landscapes with extreme grades, drainage can be a problem if your house sits at the bottom of the slope rather than the top. It can also become a community problem if you have neighbors at the bottom of your yard.
Erosion control on slopes and hillsides is usually addressed in the same manner as nature would do. With plants and possibly rocks. And as well as creating usable space, water can also be slowed down by the use of terracing with retaining walls and decks.
This is one of our own backyard designs that addresses an extreme slope and hillside landscape in a very short space. Generally, most folks don't have to have to deal with a steep grade like this. Still, the principles and ideas can be scaled to a smaller lot.