How to run NPCs in combat (Days of the Damned, D&D and all RPGs)

I have been recently discussing the subject on multiple forums. The context is usually D&D 5e, and the questions are:

- Should the NPCs attack the wizard first, since he might have lower AC and some good area attacks, or deal with the raging barbarian first? Are they even sure the old guy in robes is a wizard?

- Does the paladin need some kind of "Defender" role to "mark" his foes so they don't attack anyone else, or do the enemies attack the big armored guy first anyway?

- Should my fighter have an opportunity to use his Polearm Master and Sentinel feats, or are all enemies intelligent enough to assume everyone holding a halberd has such talents and therefore shouldn't be approached?

For me, any answer that ruins the fun of the classes and feats (or makes them useless) are not good enough. When in doubt, let the PCs be awesome. Now, if the PCs repeat the same tactics over and over again in the same fight, is obvious that the enemies will avoid it; not only because it makes sense in character, but also because it gets boring after a while.

In any case, I am currently finishing the "GM's Guide" for Days of the Damned, my "new school" RPG (okay, "middle school", maybe), and I thought this excerpt might be useful for D&D players - or for any RPG, really.

Let me know what you think!

This guy can be ANY class. Check the PHB!

Chapter 5 - To Rule in Hell [excerpt]
Controlling NPCs in a fight can get tricky. The GM will often manage multiple characters at once, while dealing with a new set of traits and powers in each combat and trying to keep things interesting and fresh at the same time. Here are a couple of tips that can help you out.

When to fight
First, remember NPCs will not enter a fight they cannot win unless they have a very good reason to do so. In fact, even when they know they will win, the fear of death and injury will keep most people (and animals) from fighting without a purpose, specially when they can get what they want by negotiating, begging, or running away (even if they want to fight another day under better circumstances).
Of course, a few fights might be unavoidable. Some NPCs are just too honorable, stupid, desperate or bloodthirsty to look for better alternatives. Many will fight to protect an important place, person or possession, but few are willing to risk their lives for that, unless fighting for a focus.
The damned will often fight for no reason, but even they will negotiate if the circumstances are unfavorable for a fight.

How to fight
When you control NPCs in a fight, you might feel compelled to think of them as moving pieces, and play them tactically as if you were playing a game of chess against the PCs. Avoid this urge.
Each NPC has its own capacities, knowledge and goals. Remember, most NPCs know nothing about the PCs and their powers, even if the GM does. Do not fall into the trap of assuming the NPCs will always come to the right conclusions. “The old guy with a staff is probably a sorcerer” is an uncommon assumption – instead, he is most likely someone that needs a walking aid (at least until he casts a spell).
Once the PCs start fighting and using their abilities, some things will become obvious, and NPCs will react accordingly. Still, most NPCs will not be able to see the whole picture at once. One easy way to dealing with this is assuming most NPCs will attack whoever hurt them most (individually, not as a group) since their last turn, unless they have a reason to do otherwise.
A good leader or tactician can change everything – he can order the other NPCs to work as a group, making the best choices for their side even if he needs to sacrifice a soldier or two. A good plan will make NPCs ten times more dangerous, at least until the plan is derailed. A careful study of the PCs tactics will give the NPCs an edge (and vice-versa).
In short, play NPCs not as pawns, but as people. Intelligent, experienced NPCs will fight intelligently, bestial NPCs will fight instinctively, and stupid NPCs will often make dumb mistakes.

Source.

When to stop fighting
Even if the NPCs do get into a fight, they are not necessarily fighting to the death (fighting for a higher focus might be the exception). Most people will surrender or flee after a major wound, unless their side is obviously winning, and even then, they will give up after a second major wound. This cuts both ways – most NPCs will accept surrender and will stop fighting as soon as they get what they want.
Once again, the dammed, the corrupted and the insane are more likely to fight to the bitter end.

All images copyright of Wizards of the Coast.

UPDATE: this eventually became an entire chapter in Teratogenicon. Check it out!