NPCs are action holders that can be placed in the world that take the appearance of other players. They can be customised with options like a skin from Hypixel's skin library or actions to run when the player interacts with the NPC.
NPCs cannot move, but they can be set to always rotate in the direction of the nearest player. They can also be given a custom name, however unlike holograms these do not support placeholders. This nametag can be toggled off.
Skins
An NPC's skin can be customised with over 600 different skins, including an option that copies the skin the player is wearing. This can be seen on NPCs in Hypixel's lobbies that show the player their game stats. There are skins to pick from the skins used for nicked players as well as skins used in SkyBlock.
All NPC skins with the exception of the dynamic player skin can be used as skulls in the NPC Skull Pack. This skull pack was added after an exploit allowing you to create custom skulls was patched, as some players may have wanted humanoid player heads.