I'm not sure how best to phrase this question, so here goes.

If I wrote a script to make the bearer of an inventory item take damage over time, and then applied this script to a very common world object, what would happen to various npcs?

Presumably the game wouldn't damage and eventually kill random unimportant bandit halfway across the world, right?

As a followup, would each object with the aforementioned script have its own unique set of instance variables?

For example, if I make the script count from 1, increment by 1 each time it was called, and do damage equal to the counter to its bearer, would giving two npc's the item kill them both just as fast (not faster) than if I'd just given one of them the item?