RPGs are inherently character-based games. The term character should in this context be understood as not just physical representations, i.e. the avatar embodies the player, but as something more.
RPG characters have features that develop throughout gameplay, and commonly personalities, goals and motivations that are either pre-defined or in case of player-controlled characters, which emerge from the projection of the player into the character and control of the character during gameplay.
While the typical RPG contains many characters, it is the player-controlled character or characters which form the focal point of interaction between the player and the game world.
This makes RPG character design important to development - if the character is not interesting to play, the gaming experience will not be of a sufficient quality to motivate the player to continue playing.
Fascinating characters can make a game and create lasting relationships with the player that keep them coming back for more - as is evidenced in the game series featuring characters such as Lara Croft, April Ryan, Max Payne, Crash Bandicoot and Sonic the Hedgehog.
In general, there are two ways of approaching game character design in RPGs: Either completely pre-define the character (e.g. the Final Fantasy-series), potentially with some room for customization by the player, or let the player inhabit a "shell" - an avatar which the player can project him- or herself into (e.g. Diablo I and II).
There is an ongoing discussion about the strengths and weaknesses of pre-defined vs. player-scripted characters, and the purpose of this piece is not to debate the relative merits of different solutions to character design.
In general, most RPGs fall somewhere in between the two extremes, for example in offering development of skills/stats, customizable appearance and the opportunity to act along a good-evil axis when communicating with NPCs.
This offers some support for the player to either project their own personality onto the character, or create a character with personality and behavior different from their own. There is no ultimate right or wrong approach; many different forms have been shown to work in practice.
Irrespective of the balance between pre-scripted and player-scripted, the lead character of a game story in an RPG is a most important element and is normally player-controlled. If players cannot associate with the lead character the storyline will not be enjoyable, no matter how great it is.
Where games differ from traditional media such as books and movies is in the interactive relationship between the player and the character. Therefore the character has to be compatible with the viewpoints and psychology of all the potential players in the target audience. Maintaining such a balance in character design is very difficult - it is one thing to design and describe the character, and place it in the game world.
But the game designer also has to ensure that the way the character moves and acts follows the singular vision of the character; and furthermore ensure that the player can add what the game design either intentionally or unintentionally leaves open.
Because player characters (and to varying degrees non-player characters) are alpha and omega in RPGs, a substantial amount of attention to their creation is necessary to ensure that they function as intended.
In games with as varied gameplay opportunities as the typical RPG, players have a wide freedom in testing boundaries, developing strategies and in other ways utilize their characters in ways unanticipated by the designer. It is therefore always exciting - and often frustrating - to see what happens the first time the players sit down in front of a prototype and alpha-phase testing is begun.