A couple of the RP's I've been in and have GM'd, we've included NPC lists that were relevent to your character. Additionally on the ones I've personally GM'd, I generally create a list of central NPCs such as the city's mayor, chief of police, and any other notable character. As Lillian said, they help to flesh out the world and in regards to the character specific NPCs I've always found that they help give your character a further sense of existing. That nice little 'slice of life' that says 'Hey, this character actually has a life and didn't just pop up for the sake of the RP.' Sometimes I even write whole posts from the perspective of the NPC, it's fun sometimes to describe your character through someone else's eyes. That said I predominately play Superhuman RPs and thus this all works very well for that particular genre. In terms of who can actually control an NPC, character specific ones were generally up to the discretion of the creator. The ones I'd create as a GM were situation specific however as to who could control them. As was mentioned above, a villain character could be too easily manipulated for a player to instantly win so generally I would impose limitations to control during combat situations. These limitations generally include making sure that everyone gets a go at the villain character(s). In the case of multiple opponents I always ask that characters react as 'realistic' as possible. In other words depending on abilities and skills ensure they don't take on five opponents at once and leave nothing for anyone else. As with anything in RPing, there's a lot of onus on both the players and the GM to ensure everything stays in check. That said I definitely believe in the importance of NPCs to flesh out a world and fill it with life. Look a video game, could you image just wandering empty streets with no NPCs around to bring the setting to life? It does make quite a difference in players and the GM take the effort to breathe that little bit extra life into their settings.