I see what you're saying about a potential problem. Personally, I figure it'll all balance out. If someone makes it all about them and their NPCs and it's too static, people won't RP with them at all and it's the self-centered player's loss.
As for what I do? One of my characters runs a tavern, for example, so I'll bring it to life a bit with a recurring NPC waitress that some players have gotten to know. I like to think that I'm just adding environment to be interacted with rather than making a static story play before everyone's eyes.
Another example of my NPC usage was I ran a couple events that involved breaking into somewhere, but no one in the PC group had much in the way of computer expertise, so I gave them the NPC that had been prodding them along with the plot so far and had computer experience. - Of course, this requires more of a GM friendly environment than a lot of places, I think.
As for relatives? I said in another post I've tried looking around for a couple roles to be filled, but it's just never panned out, so I bring them on as NPCs. - I try to avoid playing NPCs for the sake of having them, but rather because they allow me to open up stories that otherwise would be much harder to tell.
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