Quick NPCs (DMG)

Creating a full-blown NPC with a history, unique physical characteristics, personality traits, skills, a morale rating, and so on, is a time-consuming process, something the DM can't do in the middle of a game session. Fortunately, there are quick ways around this problem. By using these, the DM can create NPCs on the spot without slowing down his game sessions.
1. Create only as much of the character as the players are going to see in the game. First and foremost, the DM should never create more than he needs. Running a role-playing game is a big job and there is no need to create more work than is necessary.
If an NPC is just an innkeeper or a groom or a smith, the DM doesn't need ability scores, proficiencies, or detailed lists of equipment. All he really needs is a physical description and a personality.
When the player characters run into a hostile fighter, personality is not tremendously important. In this case all that is needed is level, Strength, weapons, and Armor Class.
2. Create and use stock characters but don't let them dominate. While it is fine to have every innkeeper and groom and smith different, this creatures a lot of work on the DM. Some DMs are quick enough and creative enough actors to do this with no problem; others are not. There is nothing wrong with having a standard or stock shopkeeper or peasant.
If an NPC is minor or unimportant, role-playing a detailed and intriguing personality can even get in the way of the story! The players may remember that character and perhaps forget more important ones. They may decide this minor character is important to the plot. In a sense, the DM's creation has stolen the scene.
Balancing major and minor characters isn't easy, however. If all the minor NPCs are stock characters, the game will eventually become dull and boring. The players will resign themselves to meeting yet another crotchety, old peasant or greedy and suspicious innkeeper.
3. Create as you go. The DM can start with nothing more than an idea of what he wants an NPC to be like and then ad lib the personality and description during the course of play. This allows to him to create a character that interacts with the imaginations of the players, since the DM reacts to their suggestions and actions.
However, the DM who does this has to be careful to be consistent. This can be hard since he is making it all up on the fly. He should be sure to keep notes of what each NPC does and what he becomes as he develops. This way the NPC can remain the same from game session to game session.
4. Do your homework before and after game sessions. If the DM knows the characters are going to meet a particular NPC, he should at least make some basic notes about that character before the start of the game. These may be only a few scribbles about personality, but it will at least provide a starting point.
After a game session, the DM should add to those notes, expanding them with anything that came up during that session. If these notes are maintained and the NPCs filed so they can be found again, the DM will have less and less work to do each time. With time, important NPCs, stock characters, and improvised encounters will take on unique personalities and backgrounds. This enriches the game for everyone and makes that DM's game just that much better than the next guy's.