Services
Each settlement offers a number of services. Tentatively, these are all tabs of a unified trade page. Each tab corresponds to a different guild, represented by a single NPC. The left side is a list of everything offered by the NPC, the right side is everything offered by your party. It may be a good idea to not only include items in this menu, but also services.
Services show up at the top, above the list of items in their own list. Each service has a button to expand it, which shows a custom per-service form. To rest at an inn, for example, there is a slider for how many nights you would like to pay for. Doctors may have a healing menu for different treatments (bandaging, medicine for diseases, surgery). Smiths may have a menu where you can search for a custom piece of equipment designed by another player which you can pay them to produce. Mount & Blade Bannerlord has a good reference for this menu, including the ability to trade intangibles (the barter menu with other lords kind of has this).
Halbe: Brothels may provide... other services... for a morale bonus. ||But also a risk of being afflicted by a disease||.
In the center of the screen, clients may render a 3D window of the NPC representing the service. They can have dialogue that plays, like a greeting when you open their menu, a goodbye when you leave it, and comments as you interact with their menu. But this should never interfere with the gameplay. You don't have to click through dialogue in order to buy something, it just plays in the background as you use their service. This is not important for the MVP, and later down the line this would also be a great opportunity to add voice acting and mocap to give the world some personality.
Halbe: The inspiration for this is the Maiden in Black from Demon's Souls, who recites an incantation while you are in the level-up menu.
Social
Each settlement has at least a noticeboard and tavern, which serves as a social hub for chatting with other players and forming parties. The notice board is where NPCs post quests, which players can reply to. To form a party for a quest, you essentially post a reply on the notice for it which links to your party. This reply includes information about how many party members you're looking for and what requirements you have for them, if any. For example, you might specify that you need one character with a ranged weapon and one character with armor and a hammer. Anyone who clicks on the link will join your party's groupchat as a stranger, where you can formally let them in or kick them out. The notice for the quest will automatically update as-needed. If someone requested to join your party as the ranged specialist role and you accepted them, then this slot disappears from the party listing.
All of this is done in hypertext, but what's ostensibly physically going on in the world is the listing on the notice board was written by an NPC in need, then the reply to it is the rumors traveling around town that "a couple of adventurers are planning on slaying those goblins that have been ambushing the merchant caravans, I hear they're looking for an archer. You should seek them out at Grub's Tavern if you're interested". Then when you show up in their groupchat, you're approaching them at their table.
Off-Topic
Not all socialization in settlements is relevant to quests. The tavern is also effectively a public chatroom. Later, after the MVP, we can also give players the ability to purchase a building and make factions which may serve as faction-exclusive chatrooms.
Halbe: Or they could freely discriminate in other ways. In-world racism between Elves, Dwarves, and Humans would be very appropriate. Even the kind of discrimination that would be considered objectionable in the modern day would be fine, like sexism or intra-human racism, due to the system described in the next section
Moderation
We don't want to be the speech police, but there is inevitably going to be spam or links to pornography and other objectionable content that we will have to deal with. However, it would be great if we could give players the tools to enforce speech themselves and opt-in to more strict moderation than the bare minimum needed to stop spam and illegal content. Essentially, a player-run faction could own a place like a tavern and would be responsible for handling the moderation. There can be multiple taverns in a settlement, so if one of them has an overzealous moderator then you could simply go to one of the other ones. If they are all overzealous, especially if its that a particularly obstinate group of players are trying to establish a monopoly to enforce their annoying speech rules, then we can leverage the fact that this is a game not just a forum. Steal their stuff, assassinate their characters, burn their building down. Normally, these things would be hard to get away with. But players might have the ability to rate the moderators, and if enough people complain then we can increase the likelihood of success when attempting these "faction warfare" actions (when you do not have the will of the people, player establishments are protected by favor.
None of these player-run social hub features should be in the MVP, we will just be very selective about who we invite for testing until we add support for this stuff.