lots of games you can interact with the characters, but if that character is part of the game itself, then it just has a limited script of things it can say, and if you keep trying to talk to them it will just cycle through its script over and over.

so calling them NPC's is a way of saying that some people can only repeat whatever script theyve been given and don't have any independent thought process of their own.

Not only is it uncannily true most of the time, it also really pisses them off.