Right now, an Object Script attached to a Token-- I tried a Spell effect Script, and got the same issue. Not tried a Quest Script yet.
Yep, tried it myself too - with no prevail. It is possible, that it has to be in an OnLoad block... I will still try once, making a quest that gives an NPC the blindness. Will report back in a minute.
EDIT: I got it to work, when I used a reference. That's possible it works only that way. Will test it further.
EDIT nr.2: So it would seem. I couldn't succesfully reference the NPC using a spell, and even with an token it didn't work. So, if it is just one NPC you want the blindness for, the easiest (and possibly the only working solution without OnLoad) is to give the NPC a reference name, and then use it in the script; be it an spell or an object - either way works.