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NPC building techniqueby Beau Yarbrough
Like I said, I'm lifting from two "Dragon" magazine articles, the first and primary being #184 and C.M. Cline's article "The 7-Sentence NPC."
In the article he advises that you describe seven aspects of the character in (roughly) a sentence each. (Obviously, for more complex characters, some of these descriptions will be expanded:
1) Occupation and History -- "Serge Varli is the innkeeper of Midwood's Shady Dragon Inn, having bought the business almost 20 years ago."
2) Physical description -- "He is a tall, broad-shouldered man with a neatly trimmed black beard and a growing belly."
3) Attributes and skills (exceptional ones only) -- "Serge is legendary for being able to eat or drink nearly anything without dimming his robust health (Constitution 17) and his skills as a chef made those who knew him back in Krakatos that he was destined to be the chef for a noble or for some exclusive restaurant."
4) Values and motivations -- "He is devoted to his family and, surprising for someone in his position, his privacy."
5) Interactions with others -- "Direct to the point of bluntness with commoners, Serge is polite but not fawning with those he believes to be above his station (namely, nobles, clerics of the Church of Traladara and wizards)."
6) Useful knowledge -- "Making the most of his self-imposed exile to Midwood, he is a master of turning available foodstuffs into fine cuisine and knows more about local game than all but the greatest hunters, trappers and fishermen."
7) Distinguishing feature -- "Serge's one concession to vanity is his beard, which he is forever checking in reflections and fussing over."
In addition to the above -- which can be fleshed out on the fly but form a rounded-enough character for 90 percent of NPCs -- I also follow the advice of the new "Dungeoncraft" column from the "Dragon" and give major NPCs a secret. Since Serge is the father of two of the player characters, all of whom I'm trying to give substantial ties to the setting, he gets one:
"Serge fled Krakatos with his new bride Stefana to save her from the clutches of his old flame, whom he had belatedly discovered was an up-and-coming member of the Iron Ring. Unfortunately, he didn't and doesn't know that she was also pregnant with his child, and that his daughter has followed in her mother's footsteps and knows all about him and his new family from Iron Ring spies."
Quick and dirty NPC generation, with details that matter to play, but nothing that doesn't -- full stats would be a waste of time to roll up for him, so why bother? The only other stat I attach is an alignment, which in Serge's cases is Neutral Good.
I keep all this info in a growing "Midwood" document on my PC and print out a new copy when I DM.