Non-Playable Character
From Hyfenwiki
A non-playable character, also called a nonplayable char and often abbreviated to NPC, is a character in a Role Play or Role Playing Game whose actions and perspective are not assumed to be that of an actual person participating in the RP or playing the RPG.
In Role Playing Games
In role playing games NPCs are characters that the player has no control of whatsoever. Their actions are determined by chance or instructions (board games; e.g. Dungeons and Dragons, etc.), programmed instructions (video games), or just made up or introduced via the script/plot (live-action).
Seeing as NPCs as they are modernly known originated with these forms of Role Playing, the term is used in its truest sense. Namely, an NPC being a character that a participating person has no control over whatsoever. In live-action role plays, NPCs are often third parties that serve one and only one purpose throughout the event.
In Written Role Plays
In written Role Plays, NPC as a term is somewhat of a misnomer. In written RPs, NPCs tend to be characters whose actions are determined by participating members, but whose perspective and point of view are not focused on in the story. This fact too is somewhat misleading, as sometimes individual NPCs are very vital to the plot/story. Put simply, NPCs in this sense are "extra characters" that fill in the cast (the cast being characters that represent one individual Role Player/participant).
Also in contrast to a normal character in a written RP is the fact that NPC's actions are often controlled by more than one participant. Multiple RPers control the actions of NPCs, using them in the story as they see fit. for this reason too, the actions of an NPC are specifically described and defined, while emotions and thoughts are generally only referred to casually, and always in the third person (unless an RPers char is speaking to the NPC). Motives are very rarely defined for NPCs within a story, though backstories are common in NPC character profiles.