"Predecessors to Skyrim made use of an artificial intelligence system known as Radiant AI. Skyrim makes use of an updated system known as Radiant Story.[8] It allows NPCs to "do what they want under extra parameters", as stated by lead designer Todd Howard."

That's a quote from Wikipedia. Now, from what I know, Radiant Story dynamically alters stories and quests based on your characters actions. Radiant AI is still included as a separate feature that determines how the AI work, and has been greatly updated since Oblivion. I have had to correct the Wikipedia page on Skyrim a few times in the past, but the source sited for this particular point was not online so I could not verify it, and I thought I'd check to make sure I have it right before rewriting an entire paragraph.