One of the situations that games grind to a halt in are when suddenly the PCs find themselves entering a public place with a crowd present. Courtyards, taverns, or city-squares, these places are full of people, and as a result, full of people that the PCs can talk to. The tricky part is deciding who they talk to. Many published adventures have detailed, generic responses for specific NPCs to give when confronted by the PCs, but offer absolutely no advice on how to get your PCs to talk to them in an organic way.
One approach is to literally describe everyone in the vicinity. It works for dungeons, it should work for roleplaying right? However, if there are more than two or three people in the area, the game will soon be bogged down by your descriptions of every myriad character that was in the area. Not only is this tedious and boring, this is also extremely unhelpful: Inevitably, you will end up over-describing the important people who might tell the PCs something special or offering a quest hook, even though there is no real reason for the PCs themselves to know this. Additionally, oftentimes you will take so much time rambling and randomly describing every person in the tavern that by the time you are finished they forgot everyone but the last person that you described.
The Dungeon Master’s Guide 2 suggests that at this point in the game, you should ask for feedback from your players, asking “who do you go up to?” and task them to invent their own NPCs. However, while this seems to detract some work from your pile (no more drawing up minor NPC responses ahead of time!), this will actually turn into more work when you have to come up with an entire personality and backstory for a character in about five seconds. Additionally, this strategy is just begging for one of your players to say, “I talk to that very nice and kind looking person who is holding tons of magic items that he clearly can’t use and is looking for someone to take them”. While you can obviously circumvent this situation with ease using your patented Dungeon Master Hammer of Authority, this will derail the game, and will likely end in frustration for both your players and yourself.
My favorite method, which I invented by myself (though I would not be surprised if someone else had also independently developed), is to create a “Random NPC table” that contains everyone that is actually in the room. Instead of telling your players “in the tavern you see several patrons sitting around: a grizzled looking war veteran with a scar and a broadsword sitting by himself in the corner, two farmers playing some sort of card game, a lean elf in the corner sipping an ale, etc. etc.”, just tell your players “in the tavern, you see several patrons”. If the players tell you they want to talk to someone, roll a die (probably a d6-d10, but this could vary based on the number of people in the establishment), and then tell them that they walk up to the specific person you rolled up. This way, the players remember more details about the person while talking them without bogging them down in unnecessary detail, while still maintaining a sense of realism to their world, as opposed to a world with a select number of NPCs that have very obvious “quest-giving hats” on. If the players want to talk to another person, roll the die again. NPCs that actually are prominent in the location (say, the bartender in a tavern) can take their own designation: allow the PCs to confront them directly.
An added note to keep the PCs from wandering around all day is that conversations do not occur in a vacuum. If they start asking the first, rather inconsequential, farmhand if there are any rumors of cults in the city, perhaps the wizened elf sitting a table or two over will overhear you and call you to him to actually give the quest.