The goal of the game is to acquire power and influence. If you could go about this any which way you chose, the interface would be a little complex to handle, I think, not to mention it being a design nightmare for me. So, instead, the game is divided into a series of quests. Each quest represents an attempt, on your part, to further your goal of heading the Hearthstone family. For example, a quest could be "learn the 'Lich' spell", "assassinate Morgan", or "attend the mayor's cocktail-social".
Whenever you are on a quest, the game considers your character to be actively pursuing that quest. The most obvious manifestation of this is that conversations with pertinent NPCs will then be geared towards the fulfilment of that quest. Imagine there are two quests: "rescue Sally's kitten", and "sacrifice twelve children to the demon Moloch". If you talk to little Sally when you have selected the "rescue" quest, you might say "Well, Sally, where did your kitten go?", to which she might reply "He's up in that tree. Please save him."; while if you had the "sacrifice" quest selected, you might say "Say, Sally, I left some candy out in the woods over there; how'd you like to come with me to get some?", and she might reply, "Mmm, candy. Yay."
Note, however, that in the game doing anything drastic will require more than simply talking to NPC; in other words, I'll try to make sure that you can't accidentally do something with dire consequences.
At first, there will only be a very small number of quests open to you. However, as the game progresses, as you meet new NPCs and enter new locations, that number will expand greatly. Usually, completion of one quest will open up one or more other quests, so that "learn about the priest" leads to "befriend the priest", "sacrifice twelve priests to the demon Moloch", "become a sub-deacon", and so forth.
Not all quests are winnable, and some may simply not be worth the effort. In the above example, if the priest already hates you passionately (perhaps he's heard about your tendency to sacrifice people; very naughty), it may take too long to woo him over to your side. However, if he's the most influential person in town, it may be worthwhile no matter how long it takes.
Essentially, then, it's a game of time-management, as lame as that sounds. It's about milking the profitable quests for all their worth, and passing over the less profitable ones. At least, that's the way to play if your only concern is victory, i.e., stewardship of the Hearthstone family. Hopefully, though, this quest system will provide enough variety and interest that the game will be fun to play even if you ignore the main quest completely. At least, that's the idea.