NPC (acronym) - Non-Player Character
An NPC is not just any and every Mob in the game. It has a more historical meaning, going all the way back to D&D, applied only to characters in the game that are not controlled by a player. This can mean people you talk to for a quest, merchants you buy things from, or the trainer that teaches you your new skills. The key is that they are basically the same as a player-character, but they are controlled by the Game Master (or, in our case, by the Server).