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I tend to focus on three different kinds of Non Player Characters.

1.  Bad Guys

This includes anyone who wants to use the Player Characters for their own gain or simply wants to kill them. The skulking Ratkin who wants your shiny things. The Mountain Troll out looking to make a meal of you before the sun rises. That manipulative harpy of a wife who keeps busy by plotting your death. And, Oh, so many more!

2.  Good Guys

This includes anyone who wants to help the Player Characters for any reason that doesn’t end up screwing them over later. Okay, that’s not completely true. Sometimes they try to help and it all just goes awry. But I don’t count that as “screwing them over”. That’s called a Plot Hook.

3. Everybody Else Guys

These are the vast majority of people in the Campaign World. People just trying to hold it together, feed their families, and get their job done. The town mayor, overwhelmed with responsibilities. The farmer, worrying about the daughter he is about to marry away. The town guardsmen, struggling with whether to take a bribe or providing for his family.

What am I getting at?

This is just my simplified method of starting the process. I put them into one of these categories describing the core of how they affect the Player Characters. Because, if they don’t affect the Player Characters then they’re irrelevant to the story. Everything else comes later; assigning gradients of chaos, law, evil, or good, game mechanics, personality notes, and coming up with something (sometimes anything) to try and make them memorable.