Reputation is a crucial aspect of gameplay in The Elder Scrolls II: Daggerfall. Even if socialization is not a player's primary motivation, it behooves them to be aware of the connection between their words and actions towards NPCs. There is little that happens in the game without a reason.
If one spends their time insulting others or otherwise treating them unkindly, they will begin to receive hostile dialogue from other NPCs. Likewise, treating others with respect gains positive reputation points.
They are not, however, the only character capable of making allies and enemies. A person is seldom a hermit, but often a member of an order or a guild with interested friends and foes. Regardless of connections, the game distributes reputation to the reaction of all NPCs to the Hero.
Reputation affects nearly every single aspect of Daggerfall. Store prices, jail sentences, bribery fees and earning potential are all affected by the player's reputation. You will not be asked to do sensitive and extremely rewarding diplomatic works if a ruler does not trust you; guilds will eject you from their charters if you are too much of a bore. The rewards for developing a trusting relationship with a bay resident are almost without measure.
Everything changes, and friendships can be brittle things. The baron will not always need the Dark Brotherhood, and the Dark Brotherhood may someday need you.