|Non-Player Character, often shortened to NPC. Describes a game character that players have no control over (as opposed to PCs, "Player Characters").
NPCs include both friendly and non-friendly computer controlled entities, although usually the term is used to refer to friendlies (enemies being referred to as "monsters" or "jerks"). Friendly NPCs can usually talk to players, either disseminating information which may or may not be important and/or amusing; providing a service, such as a store or helpful ability; or as a plot point, allowing the player to further a game's story.
Unfriendly NPCs are mean and must be killed.