Background
Some of my previous questions (see What should I do when other players refuse to engage with my character's flaw? and Excessively clever characters vs. narrativist RP?) have alluded to my severe trouble with classical roleplaying and story structure — for as much as I try to RP, I find myself stepping all over the underlying constructs of narrativism, much to the chagrin of many players I meet. This has been a thorn in my side for years now, to the point where I know players who refuse to RP with me because they cannot trust me to not stomp on their narratives!
If you skipped the background links, it should also emphasise that I mostly do GM-less/cooperative freeform roleplaying online — this is in a proto-MMO environment that is used largely as an augmented play-by-chat.
The problem at hand
With some help from the awesome BESW and Doppelgreener (and others, too!) in chat, I was finally able to pin down where my roleplaying edification went awry: I see characters as systems instead of people, and stories as about the interactions between systems, instead of as about interactions between people. This renders emotions and individual character mistakes nearly irrelevant, and shifts the focus from authorship-for-drama to design-for-robustness, which severely undermines the foundations of Narrativist play — many of the issues explored by stories under this formulation are quite inherently inhuman, and direct paths to solutions are favored much more strongly than the "winding road" adventures encouraged by classical narrativism. It also denies the role of emotions in conflict, treating conflicts instead as rational problem-solving exercises where the character strips away the entire emotional framework of the conflict so that she can solve the underlying problem, instead of engaging with the emotions of either party.
So, as the title asks, how do I reframe my roleplay so that I start seeing characters as people, with the properly fleshed-out set of emotions, capacity for illogical behavior (not just errors based on say incomplete information), and human desires that people have, versus as systems which have logically deductable behavior and rational goals?
For those who are psychologically confused: While seeing people as full-fledged people IRL isn't the most natural thing in the world (by far!) for me to do, I find it far easier to do so when I have a flesh-and-blood person in front of me! So, if you are after how to distinguish this from a straight-up "how do I not see people as systems" psychology question, the factor here is "how do I apply 'people-as-people' thinking when my brain does not naturally apply it in an abstracted environment, such as online, yet has an easier time of it when the person's there in front of me?"
Best Answer
I don't think it's as much a problem of empathy, as it is of suspension of disbelief. The problem probably isn't that you aren't capable of relating to people, but that you aren't forgetting you are playing a game.
What makes a book or a movie exciting is when you forget you are reading or looking at a screen and you start "living" the piece, as it was true. Do you have the same problem believing the characters of a book/comic/movie? e.g.: When you watch a movie, do you see characters living a story or actors performing a role? In the latter case you need to work on your general immersion skill, but in the former case you just need to start looking at the campaign's story as you look at a book/comic/movie.
Start with your own character. If you can't believe your character you can't believe NPCs. Imagine you are him/her. Try to figure out how he/she thinks. What he/she thinks or would do, not what you would think or do. If you have problem separating what you think from what your character thinks, try giving him/her strong, exaggerated personality traits. Make him/her extremely childish, grumpy, greedy, racist (if everyone is OK with that), righteous, distrustful, naïve, innocent, silly, or any thing that would mark his/her opinions. This way what your character thinks is clearly distinct from what you think.
e.g.: If your character is flirty, he would like to see if NPCs are handsome and playful, and could start inserting some insinuations into his conversations.
Now that your character has a strong personality, focus on his/her thoughts when dealing with other characters. It should be easy now. Take your time to figure out how his/her personality and the other characters' words and actions determine his/her opinions towards them. Then, act in consequence, as your character would do based on those opinions. Think if your character likes or dislikes the people around him/her, how he/she dislikes them, and what he/she would do about that.
Seeing your own characters as people is the first step of seeing other characters as people. Then, the only thing you have to do is get inside their heads and see what they actually think.