A players' character (PC) is a character that is controlled by any player
A non-player character (NPC) is a character that is not controlled by any player. Most of them are controlled by scripts, but some of them can be also possessed by a dungeon master.
NPC's will pick up items left on the ground, but not go into bags/inventories. They are however, not above taking an item from a crafting station, enchantment basin, or stealing something recently placed in front of a PC.
The list of some characters on Arelith can be found in Category:Characters.