Starting with 1.2, the villagers will start "breeding" themselves to fill all of the available homes in their towns. This means that, if an NPC village happens to have some empty houses (or some existing villagers were killed), the existing ones will spread until they populate the place. This also applies for houses that we're adding ourselves, so we could find ourselves with a thriving population soon. I like the sound of that!

They'll also have an improved AI to do more than stare at you once in a while. At day, they'll walk around town and stop to look like they're having conversations with each other. At night, they'll head back to their homes until the next morning.

I wonder if those guys will move to fill the many rooms of Xpanto's apartment complex in Victoria. That'd be funny to see!

It was still doing funky stuff like that as of 1.1. I haven't seen any villages generated in 1.2 yet.

With that said, after spending so much time surrounded by dumb NPCs, it's a bit eerie to hear a bunch of doors suddendly getting opened and closed every morning and evening as people go inside their houses! It's definitely nice to see them walk around with a purpose, no matter how limited it is.

For those who were desperate for the villagers to do more than being simply there, Jeb's got something coming for you!