Everyone is the hero of their own story.
Everyone subconsciously acts as if things only happen because of themselves. Monsters exist to wear down my resources, my parents divorced because I wasn't a good enough child, the BBEG spends his day trying to outwit me even though we've never actually met, my boyfriend only leaves the seat up because he knows I hate it. The world revolves around me.
But the reality is that other people aren't worrying about you, they are worrying about themselves. To the monsters, you're just another chance to gain loot/get fed. Your parents didn't get divorced because of you, but because their love for each other started turning to hate. The BBEG is plotting to conquer the world, he doesn't even know who you are yet. Your boyfriend puts the seat up if he needs it up and down if he needs it down, and assumes anyone following will put the seat how they want it, just like he has to do every time.
NPCs, especially BBEGs, have their own life to live and the DM should be aware of what they will be doing without the PCs showing up, as well as how they will respond if they do. For example, the Death Knight disguised as a human lord has stuff to do. His plans may involve going to the opera that he has sponsored to impress the local bigwigs, then he has to continue to corrupt the governor and maybe his beautiful and impressionable daughter.
What's that? Five strangers have walked into town? Are you serious? I'm watching the opera here! There are a hundred strangers in this town every day! What does, "Oh, but they're PCs!" mean anyway?
If the BBEG's response to the news of five strangers walking into town is for him and five of his hardest minions to
fireball the 


ing town hall on the off chance that these
must be the foretold heroes, then by the time the
actual PCs turn up then the town will be a smoking ruin.
In real life, if you were a wizard, would this make your life better? Well, yeah! I could have my
unseen servant do my chores,
teleport would make visiting my in-laws easier (Damn!), and basically, life would be sweet. Why would I load out on death spells? Why would I expect to be in combat? I've never been in combat yet, and I'm over 50. Sure, I might have one or two combat spells because, well, you never know, but to have my entire spell loadout to be optimised for combat would be a total waste of my skills if I never see combat.
So an NPC's loadout is going to be a mix of combat and non-combat spells, and his reaction to news about strangers in town is unlikely to be the nuclear option!
Only if the NPC is going loaded for bear on the grounds that he has a specific enemy to fight would his loadout be optimised for combat. Only if he had some reason to believe that these particular strangers were both willing and able to kill him would he nuke the town hall from orbit.
Playing the NPCs realistically results in the players making realistic decisions for their PCs, and this helps them avoid the 'murderhobo' stereotype because they can assume NPCs don't exist merely to kill them.
Players: We go into the cake shop and buy some cakes.
Baker: Adventurers! Die!
DM: You picked on the wrong baker! This one happens to be an archmage and he can tell you are adventurers just by looking. Roll initiative, suckers!
Players: ...we just want some cakes...
Next time....
Butcher: Welcome to my humble store! How my I be of assistance?
Players: We kill him and take his stuff, then move on to the haberdasher's. What is a 'haberdasher' anyway? Probably another word for 'archmage'.