Definitions for "NPCs"
Non-Player Characters, the "extras" and others controlled by the GM in a roleplaying game.
Non Player Characters. NPCs are all the characters that are not Player's characters.
this is a general term for any character in the game that the player does not control. Most often it is a generic catch-all term for (initially) non-hostile entities that the player's character encounters. New to the series, Essential NPCs (NPCs that are vital to the game's main storyline—they cannot be killed, only knocked unconscious) will be indicated as such, and cannot be killed until after they have fulfilled their function in the story. Experienced Morrowind players may recall (albeit probably not too fondly…) that if an NPC that was essential to that game's main storyline was killed, the player's character had doomed the world, but the player could keep playing, as there was no way to “lose” the game. Please also see the Radiant AI entry for more on NPCs.