Multiuser Server AI?

This is going to be hard for me to explain, but please try to bare with me…

I have been successful in making a socket connection between multiple flash files which allow all the users to communicate to one another, watch either move around on the screen, etc. But I was wondering how do you this with npc AI. For example, if you were to be playing in a standalone rpg/adventure game, you would see npc’s walking around the village going about their business (usually you would have them walk around randomly). Now comes the question, and hard part, for me.

Try to image that there are 2 users online, and they both see the npc walking around. Those users will probably not see the same random movement of the npc. But how do I have the server act as a main game to? Like how does WoW do this? How do they have a server tell all the users online that the enemy is moving this way, or the enemy is attacking your friend, or the enemy is now flying.

Any help and understanding on this is much appreciated