Normal NPC agro range should take care of how far you want the NPC to agro.
And I haven't tried it myself yet, but I would imagine if you want NPCs to attack each other, you might be able to set the NPCs you want to be attacked to actually have low faction with a certain faction type.
I have seen servers where certain NPCs attack others, but I imagine that has been done using the quest::attack() quest function. That can set 1 NPC to always attack another upon any event.
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