NPC stands for Non-player Character. There are many ways to say this word, but all it means is that these characters do not have a role to play or either move around like regular players. NPCs are in-game characters that you could interact with, accept and or turn in quests with, buy and or trade things with, and many other responsibilities that NPCs are designed for.
NPCs are also separated into several categories. One may include that they have a job of a Merchant, Trader, etc.
Weapon Merchants - merchants that sell weapons. You can also repair your weapon there.
Armor Merchants - merchants that sell armor.
Grocers - merchants that sell needed items, gears, etc.
Traveling Merchants - merchants that usually sell items that players would need for their adventure.
Secret Stone Merchants - merchants that sell secret stones. You can also upgrade and extract stones there.
Anglers Anonymous Merchants - merchants that sell fishing gear, equipment, bait, etc.
Other Merchants - merchants that sell drinks and or food.