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In August of 1992, Dragon Magazine owned by TSR had an article on the "Seven Sentence NPC". They later put it on their website free for the public (which is why I think its ok to reproduce here - I'm sure someone will ask me to remove it if it isn't). Not only is this applicable to any game, but its really useful.

A new way to bring nonplayer characters to life (in the game, that is)

Rand the Elder is a blacksmith who has spent all his life in Arabel. He is a tall man with a heavy black beard. Rand is known for his great strength (16), skill as a blacksmith, and rather dim wit (Int 7). He values his family above all, is honest to a fault, and has a great fondness for music. Uncomfortable and a man of few words with strangers, he is talkative and likes to sing with his close friends. With his shop on the main thoroughfare, he hears many of the tales from outside the city, but often gets the facts mixed up due to his slow wit. He talks in a deep, slow drawl and pulls at his beard when talking to others.

Creating nonplayer characters for a game session is an interesting and challenging part of adventure creation. However, while great time and effort can be spent on major antagonists and player character companions, rarely does a DM have the time to put equal effort into NPCs with "bit parts". All too often, the results of this are a few well-developed NPCs and a lot of stereotyped bit-part NPCs who seem to all look the same. To give NPCs more variety while keeping down the effort in their development, I developed what I refer to as the "seven sentence NPC" (SSNPC). The seven sentences used to describe the NPC contain what I considered to be the essential elements to allow PCs to deal with and remember the NPC. Other Dungeon Masters may differ on what they feel is essential; if so, the SSNPC described here can provide a starting point for developing a new set of essential data. Just because this NPC description is referred to as a "seven sentence NPC" does not necessarily mean each NPC is described in exactly seven sentences. For the sake of the English language and clarity, sometimes more than one sentence is used for a given point.

1. Occupation or history
The first sentence serves as the introduction to the NPC, describing his occupation and giving a brief history of the character. If the NPC has a front, such as being a gem smith who is a cat burglar at night, this information can be provided in this sentence. A brief historical note can give the NPC more depth and indicate skills and knowledge that are not readily apparent to the PCs. For example Rand the Elder, mentioned at the start of this article, may be the retired adventurer Randel the Giantslayer, renowned throughout the FORGOTTEN REALMS setting and with a vast knowledge of the Spine of the World.

2. Physical description
The second sentence is a brief physical description of the NPC. In some cases this may give a hint as to an NPC's hidden occupation, such as a note that a beggar has a flash of gold in his mouth.

3. Attributes & skills
The third sentence describes the NPC's attributes and skills. Here, any attributes above or below average should be noted. When describing attributes, it is easiest to reference those used in the game. In the AD&D game, these: would be intelligence, wisdom, strength, dexterity, charisma and constitution. Any attributes not mentioned are considered to be average. Any special skills and the NPC's level of ability with these skills can also be mentioned. These skills do not necessarily have to be associated with the NPC's current occupation. For example, if Rand is an average blacksmith but a great song writer, the sentence may not even mention blacksmithing, noting only his undiscovered talent for musical composition. These skills and attributes may be widely known or known only to the NPC himself. Whatever the case, this should also be noted in this sentence.

4. Values & motivations
The fourth sentence is one of the most important, from a role-playing point of view. This sentence describes the values that the PCs must discover and exploit in order to motivate a NPC to doing as they ask. This is particularly important if the PCs are asking the NPC to do something that is against the NPC's basic principles. For example, due to Rand's honesty, the PCs will have a difficult time convincing him to shoe a horse so that the horse will probably throw the shoe after a short distance. Money probably will not do it; however, if the PCs threatened his family, there is little doubt that Rand will shoe the horse as the PCs' desire (but he will probably hate them for it). The values and motivations described in this sentence should not be directly revealed to the PCs. The PCs will have to search for clues in the way the NPC talks and acts in order to discover which buttons must be pushed to pet the NPC to do as they desire. From the DM's point of view, the values and motivations described for the NPC help the DM decide how the NPC will react to the questions and offers of the PCs.

5. Interactions with others
This sentence describes how the NPC interacts with others. Whether he is loud and obnoxious or condescending and rude, it can be noted in this sentence. Many NPCs will react differently to the PCs depending on whether they know them or not. If this is the case, it will be noted in this sentence.

6. Useful knowledge
This is also a very important sentence, from the PCs' point of view, as it describes what the NPC knows that may be of use to the PCs. This information might be simple, such as where a tired adventurer can get a good meal and a bed for the night. On the other hand, it can be a key clue leading to the next adventure. The knowledge de scribed in the given example for Rand is of general nature, which should be the case in most NPC descriptions. There should also be an indication of how reliable the NPC's information is. In some cases what the NPC knows may be very specific, such as the location of a dragon's lair or who to bribe to pet a buddy out of jail. This will usually occur when the NPC is designed for a specific walk-in part in the current adventure.

7. Distinguishing feature
The last sentence is used to describe a distinguishing feature or characteristic of the NPC. This gives the PCs something to remember the NPC by, possibly helping them to locate him in the future. It is fairly common for players to forget the names of NPCs, unless they are in the habit of writing down the names of every character they meet. If a distinguishing feature is described, the players can often recall this description if not the NPC himself. If the PCs cannot remember an NPC's name, the DM should not give it out. The PCs can return to the city and inquire for the blacksmith with the deep, slow drawl who always is pulling at his big, black beard.

Sample NPCs
To assist with the understanding of how this NPC system can be used, several examples set in the FORGOTTEN REALMS campaign are provided below.

Baron "Wardog" Muckdigger is the lord of a small land holding in east Sembia, 24 of which he is the seventh heir. He is a short man, clean shaven with a very upright posture. Wardog is a 9th-level fighter famous for his incredible stamina (Con 18) and his leadership abilities (Cha 15), as well as his alleged ability at musical composition (his works are described as being more like the sounds of war than actual music). Beside composing music, the baron's greatest love is war, and he will use almost any excuse to take up arms against anyone he thinks might prove an interesting adversary. The baron has a rather blunt and direct way of dealing with people, but mixes it with enough charm to avoid being abusive. He knows a lot about military tactics, different military organizations and how to defeat them, but virtually nothing about the back-room politics in Sembia (or music, for that matter). The baron always talks in a loud voice with his head stuck right in your face, so you can smell the heavy garlic on his breath.

Lady Erin of Loft is the demure third daughter of the Mayor of Espar in Cormyr-at least, during the day she is. At night, Erin becomes the infamous Lady Darkthreat, an assassin who employs magic and poison to destroy her targets. Erin is a petite blonde with delicate features, and men often wish to protect her (she finds this amusing). She is a 7th-level mage with an extensive knowledge of poisons and a high intelligence (Int 17), quick reflexes (Dex 18), and the constitution of a horse (Con 17). Lady Erin lives for the kill. She loves to get to know her victims intimately, using this knowledge to set up the perfect assassination. Lady Erin is always charming and warm, and appears to engage in idle gossip while taking in her surroundings and subtly pumping the other person for information. Lady Erin knows virtually all of the gossip of the nobility and rich merchants of Cormyr, as well as many private facts with respect to these people. She has a small mole on her right cheek.

Durwald of Stonecleft is a dwarf originally from the Mines of Tethyamar, and is now the leader of a small dwarven mining and forging operation in the Thunder Peaks south of Tilverton. He is average in stature for a dwarf and has a dull gray beard that he wears in two braids tied loosely around his head. Durwald is a 9th level fighter and capable leader, but a rather indifferent miner and smith. Durwald considers other dwarves' dreams of regaining lost kingdoms to be foolish and believes that only one thing matters: the survival of the dwarven race. This, he believes, is most easily obtained by earning favors and great amounts of treasure with which to buy mercenaries as cannon fodder. Durwald of Stonecleft is a clever dwarf who is always willing to deal with others and believes in "long-term investments" that he will always cash in on. He is quite familiar with the Thunder Peaks, from the Inner Sea to the Border Forest, and has personally fought many of its denizens. He is intimately familiar with the ways of the Mines of Tethyamar and, having no interest in returning, might be willing to sell this if the price is high enough. Durwald has a long scar down the side of his head that he often scratches while making conversation.