The Old Man's "intact" house.
NPCs are the survivors of the supposed apocalypse which the world is set after. Also, new NPCs and merchants can be unlocked by defeating bosses. The first NPC you encounter is the Old Man, you meet him as soon as you start up a new game and he invites you to his home to discuss what happened. Upon reaching the Old Man's home (The only intact one in the settlement) the bed inside is set to your home and he tells you a little bit about the Nightmares. Please note that this house is a safe haven for the first few nights as you can hide inside completely safe from the Nightmares, past the first few nights the player should be looking to create their own house however as you cannot craft within the Settlement. In addition, the Old Man's house contains a Workbench and Fireplace.
The player demonstrating how Beta they are in comparison to Avguard's Alpha-ness.
The next NPC the player will encounter is Avguard who stands by a lamp at the northwest entrance to the Settlement. The last early NPC the player will meet is the Witch, who can be found in her candy house at the edge of the top side of the map. She is a major part of the initial Quest line started by the Mysterious Note, which drops from the first Nightmare you kill. Within the Witch's house is a Cauldron, which can be used to craft advanced food meals if the recipes have been unlocked.
After Defeating the King Slime, a heart is dropped. When picked up, the top left house in the town will be repaired and two NPCs will be inside. One is a candy salesman, Joe, and the other is a little girl who will exchange a toy for the most expensive candy that is sold. Joe (the candy salesman) will then prompt the player to retrieve his candy-bags and then tell them about the Cave of Ringing Wind and the Ice Queen.
In the cave, the player must speak to a dwarf named Todolf and bring them 5 units of wool. Once the player has done this, Todolf tells them that a shaman has found a secret entrence into the Ice Queen's Chamber. When the Mushroom Shaman is encountered, he requests 10 units of brillig mushrooms.
After defeating the Ice Queen, the bottom right house will be repaired and a blacksmith named Roland will be inside. He begins the next string of quest and sells necessary mining and crafting resources. Roland can also repair the player's tools, weapons and armor in exchange for money.
Then, you must reach the oil valley's and reach ironville. In it there are 3 NPCs. One tells you how to use the mechanical owl, another is a shop, and the final one tells you about their problems with the markans. You can go to their leader and he will talk to you and give you another heart. This heart unlocks another NPC in snowville. This one sells various items for pets, and ingredients for food.
Then you have to go through the mechanical fortress and defeat the ancient machine. Two nightmares will appear at the end and will send you to Sunglade. In Sunglade you can find two more NPC's, Ashley and her grandma. They will help you find captain Edward who is another NPC. He sends you on quests to fix up his boat and on one of the you have to fight the nameless maiden. Then you can return to him and he will send you to the island of the dammed.
Over there, there is a final NPC, the Grim Reaper, for telling you that it is the end of early access.
Sometime in between all of this, a singing girl appears at Snowville. She doesn't seem to do anything at the moment.
The Witch's house.
The singing girl in Snowville.
The entire Settlement. The yellow arrow is on the Old Man's house.