NPCs, or Non-Playable Characters, are cats that do not officially exist in the game, but officially tie together two or more in-game cats.
Official Relationships are those created through breeding two cats together. These are recognized and tracked by the group and will prevent two officially related cats from accidentally breeding together.
Any cats purchased directly, or gained through encounters and events, are known as 'starters'. These cats don't have any official ties within the game, but they may have siblings, parents, and extended families within your group's lore.
In order to make these relationships officially recognized by the game, a family should be created. This family will then consist of two (or more!) playable characters and at least one NPC.
Currently, only one generation of NPCs can be created. This means that official relationships between two starter cats are currently limited to siblings and parent-child relationships.
SIBLINGS
Up two six characters may be established as siblings. Their genes will be compared to each other, and the possibility of them being siblings will be calculated. If it is genetically possible for all the cats involved to be siblings, two NPC IDs will be created for their Dam and Sire.
You will notice, then, that in the ID Masterlist, they will all now list the NPC IDs as Dam and Sire, effectively recognizing them as siblings.
PARENT + CHILD
This option will assign an NPC ID to either the sire OR the dam, acting as if they had a litter with your cat.
The cat acting as the parent must be officially of adult age, the cat that will be the child can be of any age.
Both cats will have their genotypes checked to verify the possibility of being related. If its genetically possible, an NPC ID will be created for the sire/dam.
When an NPC is created, you will be given a list of genes the NPC must have and a list of genes they could have optionally.
You're not required to do anything else with the NPC. They could even be left Nameless.
NPC's exist for the sole purpose of filling in a connection for breeding purposes. NPCs may not gain runes, participate in Patrols, Adventures or Events.
If you intend on actively including the NPC in your plot, it might be worth finding a geno that matches.