Radiant A.I. is the dynamic reaction to the player's actions by both NPCs and the game world in Skyrim.
The use of Radiant A.I. crafts a more personal and unpredictable experience for players by tailoring the world in response to the player's past actions and experiences. For example, Radiant A.I. may be used to set a quest objective in a location previously undiscovered by the player and populate that location with enemies who suit the player's abilities or detail NPC reactions and behaviors based on past actions.
Radiant A.I. technology has been used (although to a lesser extent) in one other Elder Scrolls game: The Elder Scrolls IV: Oblivion. It has also been used in other Role-Playing games from Bethesda such as Fallout 3 and Fallout New Vegas in which the two expanded onto it, and gave the developers the idea to expand it fully in Skyrim, but to an extent; there is never a case where the player is unable to do something because of the player character's race, class (or strong skills, in the case of Elder Scrolls: Skyrim) or birthsign.
In The Elder Scrolls V: Skyrim, Radiant A.I plays a large part in gameplay, and ensures that the game is played differently every time. NPCs will often converse with each other, or comment on your previous achievements or skill levels (eg: Hold Guards telling a player with a high Pickpocket level to keep their hands to themselves). It also delivers Radiant Quests (such as rescuing a random NPC from a dungeon) that are tailored to the player's skill level and where the player has not visited, and spawns enemies that are a good match for the player. It keeps track of your deeds, good or evil, and modifies NPC reactions appropriately. If you commit a crime against an NPC, they may send Hired Thugs after you to "teach you a lesson", or even hire a Dark Brotherhood Assassin. If certain NPCs are killed, others may assume their roles (eg: Ysolda will become landlord of the Bannered Mare if the original owner is killed). Should you drop an item, NPCs might ask if they can have it, or say "Why did you do that?" or a guard will make you bribe him to prevent a bounty. Radiant A.I. also allows NPCs to interact with the environment around them to make the game feel less linear and more organic.