An Example In Action
Welcome to Podunk!
The party is starting at level 1 in a little town on the frontier of an expansive empire. Out here, they have gone to earn fame and fortune in subduing the monsters, barbarians, and dragons in the lands where most fear to tread.
As they start out, the DM has an assortment of "Zero Reputation Quests" prepared. The merchant in Podunk needs to get some ore from a nearby mine that is supposed to be haunted. The child of a woman has gone missing, and the guards are too busy to look into it. A drunk at the bar has lost his wedding ring, and has been kicked out of his house by his wife. Perhaps a few other minor quests from others.
The DM decides that after 3 quests, the party will gain a Reputation Level. Podunk has a Reputation Maximum of 1, so after three quests, the party is known by everyone in Podunk (it IS a small town!), known as people who can Get The Job Done.
On To Townsville!
While the DM has decided that Podunk has a Reputation Maximum of 1, it turns out that the Empire has a Reputation Maximum of 10. After gaining a Reputation of 1 in Podunk, they ALSO have a Reputation of 1 in the Empire: far away people have heard about those people who swept into town one day, fixed families, saved the lost, and dispelled the Legend of the Haunted Mine as a ruse.
Bigger towns and cities, closer to the center of the Empire, have bigger Reputation Maximums. The DM has a few towns with a max of 3, a few with a max of 5, 7, 9, etc., until the capitol city of the Empire itself, with a max of 10 — become famous in Capitol City, and you become famous throughout the land!
The party doesn't quite want to shoot for the stars yet, though. They go to a mid-sized city with a Reputation Maximum of 5, seeking more opportunity than Podunk offers. The DM has chosen to keep the true maximums of the cities hidden, but tells the party can make an educated guess based on the size and centrality of the village: a bigger city has more possible fame and fortune to be gained.
In the mid-sized city of Townsville, the party finds that they're small fish in a big pond. They still have a Reputation Level of 1 in the Empire, but Townsville is big enough that the legend of how they chased away some ghosts on the frontier or something doesn't count for much.
Still, there are some folks who've heard of them. The DM prepares an assortment of quests for Townsville at Reputation Level 1 for the party, and starts seeding the hints. The DM uses the events in Podunk to seed what might happen here. For instance, if the party goes to the blacksmith here, she will have heard about their exploits in Podunk from her merchant sister there, and she's got a problem with some intractable dwarves that the party might be able to help with — dwarves who maybe happened to be linked to the group of bandits that was occupying the mine and spreading rumors about the haunting. There's also some soldiers here who have heard about how they rescued the chlid back in Podunk, and are working on a knotty missing persons case with a detective who is catastrophically inept. The DM also plops a few assorted random quest hooks in the town as well, under the theory that it never hurts to over-prepare, but most of them have some connection to what has happened in Podunk. The DM, for her part, created these related quests after the events in Podunk, and might have put some of them in no matter where the party wound up, but she's also tweaked to add some local color. Townsville is predisposed to attacks by giant monsters, so she's worked a few sleeping behemoths into the events with the dwarf cartel (dwarves are looking into extralegal measures because of a resting monster in their usual site) and the missing persons (turns out a cult of the Awakened Beast might be involved!).
As the party accomplishes things in Townsville (and keeps sticking around), the DM tethers future quests to current ones, in an ever-deepening spiral. The party gradually earns the trust and respect of more and more people, almost regardless of their personalities: if the party accomplishes the mission, they've shown themselves to be competent, which is often more valuable than likable. As word of the party spreads, and they gain further Reputation Levels, the DM ramps up the attitude of the town as well: they welcome the party, they know the party, they've heard of the famous exploits, bards sing of them in taverns, beers are bought for them, marriage proposals manifest, etc.
By the time the party is Reputation Level 5 in the empire, they're also at the maximum Reputation Level for Townsville, and, soon after they are handed the key to the city by the bumbling Mayor, they decide to leave the town they've done so much to help, and plunge right into the heart of the Empire, seeking problems that affect all of the civilized people. They go to Capitol City
If I Can Make It There, I'll Make It Anywhere
Capitol City isn't ignorant of the party's exploits. While the city has a maximum reputation of 10, the party is already at Reputation 5, and a lot of people connected to Townsville (and maybe to Podunk) have already heard of the group that thwarted the Cult of the Awakened Beast, and who shut down the dwarf mining cartel, and who even defended the city from a raging Colossus. They're well-known…but in Capitol City, they're not the only heroic people around, and their heroism is an interesting bit of minor celebrity, but little more.
Of course, even with that little bit of celebrity, they gain information on where their next adventure lies. The DM has prepared a few adventures for them based off of what has happened the last four months of gameplay in Townsville, including dwarven assassins, mad cultists of the Beast at the Center of the World, and even a quest or two revolving around a certain lost ring, and the Place Where Lost Things Go. Since this is a new region, the DM also has a few unassociated quests, such as a few dealing with Empire-wide issues, but at this point, the party's reputation and history powers its own adventures, too.
And, after five more levels (and five months) of putting down dwarves, killing kaiju, and helping the sickly Emperor discover the cure for his ailments, the party reaches Reputation Level 10, and the campaign ends with the renewed emperor giving the party a chunk of his Vast Empire to rule themselves, in autonomy, as thanks.
A Sandbox And A Stumbling Stone
This reputation system serves as a way to gradually ramp up the challenge and reward of unrelated adventures that a party undertakes in a given region, helping to impose a narrative structure on an otherwise unstructured system, and helping evoke a more realistic feeling from a given locale. It helps link these adventures together as well, helping gain a feeling of continuity.
This first helps the town feel real and breathing, and the party to feel new to the town at first, only to be trusted and welcomed later. It also serves to help control the party's access to quests, enabling them to get a steady drop gradually, rather than a torrent all at once. This helps avoid analysis paralysis, and helps each quest stand out against the background noise. It makes it easy to tie together themes for a campaign, without predetermining them, allowing the players to pick their own path.
In a nutshell, this system is one where, as the party accomplishes quests in a region, they gain access to higher-caliber, more challenging, and more involved quests in that same region. This represents a flow of trust: as the party becomes known and trusted, they are imparted with greater responsibilities.
This reputation system functions as a matter of the party's reputation as adventurers. Whether they are nice people or not is irrelevant here: all that is relevant is that they are effective at doing dangerous things for people.
How It Works
Essentially, this system is like an onion, with the party starting at the top layer as relative unknowns, and digging deeper to the core as they complete quests in the region. Each task they complete gives them some bit of reputation, and once they complete "enough" tasks (decided by the DM), they advance one Reputation Level. A higher Reputation Level gives the party access to deeper and more valuable quests.
Tip of the Iceberg: No Reputation
The party starts by default in a given region with no reputation: they are unknowns.
At this Reputation Level, the party will be able to interact with those who deal with outsiders anyway: merchants, beggars, village guards, and perhaps a few friendly citizens. If any of these folks have gossip or missions that need to be done, the PC's may hear about it directly from them, during their usual supply runs.
Example Generic Quests
These quests may be simple monster extermination quests to make the roads safe, or may involve stolen goods, or possibly guard duty, finding a missing caravan, a particularly rare item, a bit of research for a new site, etc. A beggar might have a truly sad story requiring some vengeance, or a soldier might want to send a message to a lover on the front lines. These quests don't require a high degree of intimacy with the quest-giver, and would likely be open to any competent-looking stranger chomping at the bit for adventure. They won't pay much, but they do prove the characters' competence.
Digging Deeper: Gaining Reputation
After completing a certain number of these minor quests, the party gains a Reputation Level. This represents them becoming better known and more relevant in the community around them. After the fetched the stolen ale for the dwarven ale merchant, for instance, he told his friends the story around a bar table, and now one of them has a problem they hope the party can help with.
A given region can have any number of possible Reputation Levels, but generally speaking, the more possible levels there are, the bigger the population, and the more distinct the circles. Earning the trust of a mayor in a small village might be no tremendous deal (requiring only 2 or 3 Reputation Levels), but earning an audience with the Emperor is going to require a bit more renown (perhaps requiring 9 Reputation Levels).
Determining the Numbers
As the DM, it's up to you how deep Reputation in this region goes, and how many quests lie between each Reputation Level. You're free to set this number to whatever you desire, but it is useful to bear in mind what your game session actually entails, and what you want the players to actually see. In a one-year game that spans 10 experience levels, it might span about the same in reputation levels, with similar advancement: as the characters gain XP levels, they ALSO gain Reputation Levels, and largely for the same reason (successfully completing quests). At that rate, you're looking at gaining a Reputation Level at about the same time you gain an Experience Level (about once a month, or once every three quests).
You can disentangle the results, so that the party can gain Reputation levels faster or slower than that. And, of course, a party that travels to new worlds and new towns and new kingdoms might need to start all over again. In part, it depends on what you're looking to have the ability for the players achieve by the end of the campaign. If they focus all their resources in one area, can they be honored? Or if they spread out, can they still earn a decent level of respect? If the campaign you're running is only going to be a week long, do you want them to be welcomed as heroes by the entire town, or just respected by a few individuals?
The default level has the virtue of adding Reputation to the escalating list of things you gain as you gain levels. It also mimics old D&D "name level" ideals and "end game content" possibility.