My first comment had nothing to do with the technical measures for creating a game, it had to do with the properties of the game. I was referring to persistent changes in the game world as a result of your combined actions. Yes, there was some of that in Morrowind and Oblivion, but only for the main quest and specific guild memberships. For example, if you made it a habit of killing vampires, eventually other clans should know you - and they should get harder to kill. If you typically free slaves, areas with lots of slaves should keep a closer eye on you. Sure, if you never got caught, and never missed a witness, you might could go on like nothing happened, but how often does that happen?
I dunno, it's getting hard to define in here - but what I'm looking for is a system where the world, and its inhabitants, alter the way they react to you based on the entirety of your decisions - not just specific quest lines - and in a more subtle way than is presently done. It would also be nice if NPC's reacted to each other in this way as well, but then we get back off into AI and emergent behavior topics again.
Bottom line, all actions should have consequences. Not just the ones that show up in your journal.
I understand what you are saying, and I am not saying it is not possible, but for a PC game, it is unfeasible to implement gameplay whereas the game world changes with every decision the player makes, because any reaction to the player's behavior would have to be scripted (or coded in, whichever term you want to use). Not only would it take a tremendous amount of work to create the code, I doubt any personal computer would be able to run it.
Some decisions, sure, but these decisions will first need to be defined - and not by YOU, but by the developer) , then code would need to be implemented into the game to respond to that decision. If the dev says "ok, let's have it that if the player starts killing vampires, then the vampires will group in no less than 3 NPCs, and if less than 3, try to run away from the main character". Well, you have to code the player's behavior (variable) so it can be recorded, and once the variable reaches a certain value, then trigger the vampire's behavior.
As you state, games already have that to an extent, but not to the wants of the OP. Think about what the OP says (paraphrasing): "if I stop doing a quest, the world should know about it and react to it". Ok. I'll ask, for one, how does "the world" know you are doing that quest? Then, how is the world going to know you stopped doing the quest?
So, again, the "world" may react to some of your decisions when these decisions are pre-determined or expected within the code, but you cannot expect the "world" to react to any decision you make if it doesn't know in advance what that decision is.
I will, however, recommend The Witcher to you. The game play changes substantially based on decisions you make, some of them you wouldn't even think would matter down the line.