Just as a well-played character acts within the limits of his alignment, NPCs
should act consistently with their alignments. Judicious and imaginative use of
NPCs is what creates a believable fantasy world.
Alignment is a quick guide to NPC and monster reactions. It's most useful when
you don't want to take the time to consult a page of tables and you haven't
devised a complete personality for every casually encountered NPC. NPCs tend to
act in accordance with their alignment (though they are no more perfect in this
regard than player characters).
Thus, a chaotic evil gnoll tends to react with threats and a show of might. It
considers someone who appeals to its compassion as a weakling, and it
automatically suspects the motives of anyone who tries to be friendly. According to the
gnoll's view of society, fear and bullying are the keys to success, mercy and
kindness are for the weak, and friends are good only for the things they can
provide--money, protection, or shelter. A lawful good merchant, meanwhile, would
tend to hold the opposite view of things.
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