I wrote about a new concept to map onto the term alignment some years ago here: https://spellsandsteel.blogspot.com/2015/12/alignments-that-arent-stupid.html. I wanted to write a little about using this system in action in a recent game.
The TL;DR of the above system is using the concept of alignment to denote who the NPC looks to for their opinions, and what is guiding their actions. Not Law or Chaos, or Lawful Good, or anything like that, but rather an alignment of "Reeve" (the character likes and supports the Reeve of the village, and agrees with them about most things), or perhaps "Outlaws".
What I've added to this system recently is the concept of true (or secret) alignment and open alignment - characters can act in public, or to strangers, like they are of one alignment (say, Reeve), but in private, they secretly are aligned with the Outlaws.
The setting is a village in Nottinghamshire in about 1347. The King is away in France, and in his absence, the Sheriff of Nottinghamshire (that perennial villain), is abusing his power. When randomly generating the families in the village, I added a line to the random generator which generated their alignment in the sense described above (with a chance of a second, secret alignment). Children under 18 didn't get opinions, but older children did (with a higher-weighted chance of having one of their parent's opinions).
So, when the players were canvassing their neighbours, looking for support, I would have entries for the village households like this:
Head of Household: William, 37; Sheriff (secretly Outlaws)
Partner: Alice, 34; King (secretly Sheriff)
Children: John, 14; Jane, 7
Right away, we have drama. William and Alice openly support the Sheriff and the King, so there's conflict there, but secretly William supports the Outlaws (who are working against the Sheriff) and Alice secretly supports the Sheriff (the natural enemies of the Outlaws). Maybe William is just sympathetic, perhaps because the Sheriff has wronged him or his friends, or maybe he actively aids the Outlaws with food or weapons. If the players can gain his trust, he could put them in touch with the Outlaws.
But Alice, who in public talks about the King's justice and how things will be put right when he returns, secretly supports the Sheriff. Maybe she was a childhood friend of the Sheriff, or one of his retainers. Or maybe Alice can just see which way the wind is blowing, and wants to throw her lot in with the winning side.
So, depending on who in the household the characters approach, and what tactics they use, I'm set up to roleplay an interesting encounter. If the characters are aligned with the Outlaws, William will be reluctant to help them publicly, but if they can get him alone and convince him of their bona fides, he could possibly put them in touch with the Outlaws or give them assistance. If they approach Alice, she's likely to rebuff them in public or private, talking about how the Outlaws are operating outside the King's justice and how the King will deal harshly with them when he returns - but since she's secretly aligned with the Sheriff, she's likely to inform him (directly or indirectly) of her conversation with the PC's, causing them trouble down the line.
Alexis at Tao of D&D talks about "features" in his book, How to Run. This is a design-mindset approach which asks, how will this thing be used? NPCs are there for the characters to interact with, but the traditional approach to character traits (distinctive physical features, backstory, verbal tics, mannerisms) are not features, and do not offer nothing for the players to interact with. Anything the players can't interact with is, in a real sense, irrelevant to the game.
Alignments, as presented, very much are features of the NPC: they define and colours all interactions with them, define whether they will support or oppose the player, and (with secret alignments) add depth and reward for continued interaction.
I will be generating alignments like this for all NPCs in my games going forward.