NPC's are literally just background people, it's the grey biomass that fills the scene in the immediate moment and then you will never see those individuals again. there are also higher tier NPC's called "pedestrians" who have a more permanent presence in the world and will reappear from time to time but they will not interact with you. highest grade NPC's are quest givers who will reappear and even interact with you, most often these interactions will set you on a certain path or a "quest".