Making NPCs
Now, that the players are set up, you set up your characters. You know what the players want the game to be about, so the NPCs are just tools to make that happen. The NPCs exist SOLELY to produce scenes and conflicts that hit what the players have asked for via Flags.
Look at the Focus, build characters who fit in with that, and either oppose, support, or make things complicated for as many Flags as possible. For example, if two Flags involve "Loyalty to Family" and "Always do what is right", it's easy to produce a family member who is corrupt. Notice that two different PC's can have these flags, and it still will be interesting.
Any NPCs of importance want one of three things:
1) Help from the PCs
2) Oppose the PCs
3) Use the PCs
WRITE DOWN WHAT THE NPCs WANT/NEED. WRITE DOWN GENERAL PERSONALITY TRAITS THAT WILL HELP YOU ROLEPLAY THEM.
Good conflict happens when someone is:
1) Desperate
2) Overreacting
3) Violent
4) Irreponsible
5) Immoral
6) Irrational/Fanatical
7) Hiding Something
Jealous
9) Any/all of the above.
Basically, someone's willing to do something crazy and fuck someone over. You don't even need a lot of characters like this- even one will do, provided he or she sets the rest of the characters off in a chain reaction.
The NPCs should be set up in a web of problems- some allied, some against each other, for a variety of reasons. For short term play, you want between 1-3 problems depending on how likely the players are to buy into the conflict. For most games, I'd recommend around 3-4 seperate problems tangled together. In all likelihood, the players are going to latch onto one or more of them as interesting, and in the event you toss out a dud or two, you still have something to work with.
No NPCs should be isolated, you want to be able to follow a chain of connections between them (which can be blood, sex, friendship, opposition, duty, etc.)
YOU WILL WANT BETWEEN 3-12 NPCS DEPENDING ON HOW LARGE OF A SITUATION YOU ARE BUILDING.
Nameless minions
A lot of characters will have secondary allies, servants, minions, friends, gangs, etc. These folks basically exist to serve main NPCs, you might have to stat them up for the system, but you don't need to give them motivations or consider them independently. Only do the above process for characters likely to make their own decisions.