Since the last post, my main focus was on creating character dialogue. Now characters introduce themselves and also have something to say depending on the season, the weather, whether they are visiting someone else etc. Also, they accept gifts. There are four levels of reaction to a gift: They can hate your gift, be neutral about it, like it or love it. Your "friendship" level is adjusted accordingly. A common mechanic in these games is that when you give them a present on their birthday, the gift reaction value is multiplied. Also, multiple gifts per day can be given, but each subsequent gift has an even lesser effect.
When your friendship level with an NPC reaches a certain threshold, they will reward you in some way: Either with some town lore, a present of their own, some piece of clothing, a skill increase or a food recipe/crafting schematics. Friendship events haven't been implemented yet, but at least their dialogue is 99% done. Finally, in order to unlock certain events for some NPCs, you have to reach a certain friendship level.