Encounters
One of your jobs as the Storyteller is going to be providing your characters with what are often called encounters: an exchange between player characters and creatures, monsters and non-player characters. These encounters can result in combat, discussion or some other interaction that provides a challenge for your players to overcome. Unlike general passing conversation with an innkeeper or merchant, these encounters are often intended to provide experience, information or clues that might advance the story.
Encounters are typically comprised of a number of potential combatants and the player characters themselves, in a setting determined by the Storyteller. It could be an ambush at night while most of the party is asleep or something players happened upon while exploring. It is also important to remember that as you craft and breathe life into your living world, any interaction can potentially become an encounter.