NPC's you can purchase to walk around your home, you can choose their AI pattern to be servants, guards, or patrons with corresponding speech patterns to go with it. Dress them up in whatever you can craft and place into their inventory (they will wear it automatically, limit 1 item per slot), if you fancy them something different you can pick an appearance or costume you own. You can choose what races you want based on your achievements and what expansions or DLC's you own; such as if you want them to be Imperial you require the Imperial Edition or if you want them to be Daedra like Xivilai you need to have completed all Coldharbour achievements.
As servants they will go around tidying up your home, breaking out a broom on occasion and sweep the floors. When you choose them as guards they will patrol specific patterns, stand guard or salute you. Patrons they will act as if they own the place, sitting where ever they want, sleeping in the beds, dining, laughing, and greeting you. You can assign them to be on the move, stand or sit in a specific spot permanently.
Small Homes will accommodate 1 NPC, Medium Homes can hold 3, Large homes can have 5, and Manors can hold up to 10.