I think an interesting trick Dwarf Fortress pulls off is how, in Adventurer Mode, whenever you enter a site the game first populates it by pulling from the list of historical figures living there (note that for the purposes of Dwarf Fortress "historical figure" doesn't necessarily mean "important person", but "character that the game has chosen to keep track of as the world history progresses"), and then fills out the rest of the site population with random NPCs generated on the spot that you'll pretty much never see again because they're not saved anywhere and they'll despawn as soon as you leave and the site is offloaded.

HOWEVER, if you interact with any of those randos in a way that causes the game to generate a name for them, they'll be immediately marked as a historical figure, so the game will store them in memory and keep track of whatever happens to them from that point onward, ensuring that they can be reencountered at a later time.

That way, the game is able to keep the illusion of a consistent world while only having to keep track of the characters that the player is actually likely to remember.

Also that's one of the reasons I say Dwarf Fortress in Adventurer Mode is the closest you can currently get to playing a fantasy RPG with a human GM. Many of the ways the game reacts to your actions and choices (including this one) kinda resemble the thought process a GM would follow when running a game.