It's worth noting that the sister was not my example. She came up earlier when in a discussion on how the GM is powerless to hold a player's BIFTs to the fire like it seemed some proto-5e ruleset had for at least one session. At the time I had this to say about it & someone brought up fridging soon after just to underscore how terrible she is as an example. Most NPC's players create aren't going to be the inspiration for an ignorable BIFT like the sister was in this case, instead they will come from the character's background. Prior to 5e backgrounds were something that needed to be worked out with the gm rather than thrust on the gm in a multipage backstory not even set in the world. 5e added backgrounds by default, which is good, but it also failed to include any way for those backgrounds to influence a character with complications & conflicts while making it so the PC's don't need anything that could influence them eitherOh, I see. Predetermining you have an in with the mayor of Smallville doesn't help with the mayor of Largeburg. True. Have a large family? You only have so many social contacts. We still meet the Vaalgarde test, however.
It obviates the problem with no expenditure of resources. You wave your hand, "my sister is employed here, we have an in." And, three real / game months down the road there is nothing preventing you doing the same thing. Apparently, your sister is multi-talented and travels a lot.
The issue isn't players deciding aspects of the game world, it is having a wild card to obviate rather than solve the situation. Now, we're being rather vague in our thought experiment, which is their nature. Let me be a touch more concrete.
I have been fortunate recently in having a number of new players. They were a bit boggled by the equipment lists I have, so I made a group of five "fast packs". Adventurer, Scholar, Scout, Delver, and Camper. About half the equipment is the same and the rest more dedicated to a theme. I did this because there was one too many times when the party needed 50' of rope to cross a ravine and not only did no one have any they didn't think to buy anything but arms and armor. So these packs are "training wheels" for forethought, in a way. And, if shopping is tedious for them, they have a standard Adventurer pack that covers most of the typical needs, without any intended "gotcha"s.
Another example, characters, expecially thieves with their urban focus, have a number of contacts which increase with level. I would go into more, but am out of time at the moment.
Where did I lose you? NPCs in the world need to act like they are affected by external factors in the world that impact their needs with conflicts & complications. Some examples might be floods wars monster living nearby, PCs burning down a building, etc. PCs however do not have needs in 5e. NPCs need to at least sometimes treat PCs as if they too exist in the world like any other human/elf/dwarf/etc with needs or the PCs will begin acting like murderhobos who don't care about the world either, but that only goes one way because the PCs don't need anything. Magic items aren't needed. Gold is not needed. NPCsdon't have any need to engage in appropriately flavored noblesse oblige fitting their background like NPCs that the gm wants to remain believable. There is no landholdings at stake & they can't be created because there is no need for them to fill for PCs. PCs can sleep in a gutter in the rain just fine so don't even need shelter. PCs recover so fast they don't even need to be allowed in town to safely rest up between adventures. PCs technically don't even need food & water because outlander. Because of all that when an NPC presents a conflict or complication to exist like sunglasses people in free guy.How is that going to hurt the play of the game?
The "sister of a PC" example is one that just can't be moved beyond but not every NPC is a PC's sister, some of theNPCs in the world are bad guys & their associates. Those NPCs exert influence in the world that creates complications & conflicts that a PC's sister obviously would not & are often called bad guys or villains but aren't always immediately identifiable to a PC. In a world like Eberron that might even include not quite villains like the megacorp-like dragonmarked houses that exert extreme influence over shipping manufacturing entertainment communication & so on in ways that make them a force with interests that can't be ignored by everyone with needs.
@Hussar all four of those are fine ways a GM could choose to use as a guidepost for how they handle creating NPCs for various gamestyles, that's step one & there are no problems there. Step two is when those NPCs pull back on an entity that has no needs obligations or holdings in the world. Up until 5e PCs always had things they needed mechanically as they advanced in levels & there were no problems at step two. The fact that I can work around the system doesn't change in the system the fact that the system is now designed to treat PCs like the sunglasses people explained above. Why do you keep looping back to step1 with step1 advice while asking where the problem, is in step1?.