No doubt about it, AI is a fascinating topic and there are no clear cut answers, possibilities are simply endless. AI may depend first of all on the game genre, so a platform game will have a different AI compared to an evolutionary game.
Nowadays from what I have seen most seem to have some kind a Finite State Machine (FSM), where certain conditions are analyzed and actions are taken accordingly, this works similar to IF..THEN..ELSE statements. So a NPC just stands around forever on the same spot doing nothing or walking senselessly around day after day without rest, at most the NPC is going through its FSM and that's it. When aggroed, as pointed out, most NPCs keep a hate list, where the NPC sorts who has caused how much aggro, be it through heals or damage dealt and decides who to hit on. Run out of range and the NPC resets, the hate list is wiped, it's got a clean slate, boy do I envy those NPCs !!!
Well, IMHO I find this kind of NPC extremely boring. I envision a bit more and I'll mention an example inspired by Matt Buckland's book "Programming Game AI by Example".
A story from the fictitious mining town "Backwater":
Miner Irwin goes every morning out to the mine to fill his pockets with gold, during this process he will get thirsty, hungry and sleepy, but he also appreciates digging up a certain amount of gold, once satisfied he goes to the bank and deposits the money, if he gets thristy he visits the local saloon, has a drink and talks to his buddies, if he gets hungry he goes home to have his lady who serves him some stew (both will need to communicate as well), if he gets sleepy he will lay down, when rested he gets up and at it again. Let's add to this some more sense, he may be receiving input from his surroundings, so f.e. he one day detects within 50 yds. an orc, he also determines his level and notes that he has weapons equipped, his emotional ann determines fear and he runs back to town and alerts the guards. His goals may temporarily change in favor of self preservation, Irwin goes to the local saloon for more drinks until the danger is over. Guard Erl hears him shout and stands ready to fight the orc. Erl loses the fight to the orc with the rusty spoon.
-HALT- Design decision ahead -
Option 1: Normal MMO AI's would wipe their memories, Irwin engages in the fight before perishing, the new Erl is just as "savvy", as he was before, and both will just respawn and surely be killed again and again and again.
Option 2: Erl preserves his short term memory through death, he remembers that the orc with the rusty spoon was 3 levels higher than him, he modifies his internal state and makes a note to himself: if dead by attack and enemy_level + 3 then update in table fights[self+3] values pleasantness - 0.1 and control - 0.1 . When next confronted with that orc the ANNE with emotional responses will evaluate the situation differently, there will be a moment when anger becomes fear and he may just run for his life and/or call for additional help, this orc William is just too much for him alone. The internal goal seeker of Erl might determine that when he has lost 3 battles in a row, he needs further training and emerges as a level+1, he will now be tougher than before, after some cycles, the orc finally loses the battle and Erl, 4 levels higher and 20 generations later maybe feels invincible again. He keeps standing around for a while and his abilities might slowly degrade to the original skills/levels (or he might stay at his level), this learn and forget setup would avoid players farming certain NPCs but ensures that on the long run the game world is somewhat stable. He will slowly forget that he lost 8 battles against orc William and won 2. However he just might remember in his long term memory how many battles he lost and won sorted by enemy levels and how many attacked him. He may also communicate this to his peers, in case of SMASH maybe on the same city chat channel or a special guards channel. Erl will also change guards with others and not just stand there forever, but swap with Marlo, while Marlo stands guard, Erl goes for lunch or dinner and sleeps a while. Meanwhile our miner Irwin either asks the guards for dangers and/or notices that the threat has gone away, he no longer perceives orc William in the surroundings scanning some 100 yds (just to be sure) and goes back to his original goal of getting his pockets full of gold.
If enough orcs have attacked the city, the council members might stage an all out attack against neighboring orc villages to protect themselves.
While this is still future music, this is what I have in mind for the AI, a simulation rather than just a cheap FSM.
This requires an agent capable of perceiving its surroundings (sight and words), a certain personality to evaluate perceptions, a goal seeking Hierachical FSM (HFSM) capable of sorting goals, a neural network (-> ANNE) to analyze what emotions result from its current situation applied to the personality and a HFSM that decides on memory, learning and thresholds whether to pursue its goals or take alternate actions and then carry them out. Let's call this the perception system (PS), goal seeker (GS), personality profile (PP), ANNE you already know, the memory records (MR), the decision maker (DM) and the action machine (AM). If you wanted to implement a hive mind, you would need to sync the goal seeker, the memory and probably the personality profile or if you do it in Erlang, just call the processes that represent those per hive mind.
I believe this design should enable for different actions according to each NPC's personality: f.e. when insulted, Eliza might feel sad, run home and cry, while guard Erl while take his sword and apply a subtle lobotomy. When attacked, Irwin might run for his life, while Erl fights back. When applying evolutionary rules, their behavior might even change over time. Most literature does not recommend to enable long term learning when you go life, because results will inevitably be unpredictable, so only time will tell if long term evolution is a good choice or not.
I highly recommend downloading and running "AI Planet" from sourceforge.net and also read the author's design notes, it is fascinating to watch how creatures evolve over time. Imagine this in the settings of a MMO and I am sure it will create immersion for the player, but it would also mean the game to be different according to when you joined, tough call.
In the end though, some restrictions may apply, according to how much processing power you have on the server side, if you have 200'000 NPCs in your game world, you'll probably downsize the AI a bit to match CPU power versus NPC numbers, I am eyeing the shared process structure as mentioned above.