I kind of like your idea Alrik, but it is also somewhat unrealistic. If someone sees you turn into a dragon, and they are the only one that hates you, it doesn't follow the logical assumption that he/she would tell the news to others. It would make the NPC's seem unconnected to the world around them. I think a better solution might be that each NPC has a certain group of other NPCs, spread out a little bit, that when the hate reaction is triggered in them, it also triggers in the AI of the group that NPC is connected to. It might make for some tense situations too, when you can't be sure before speaking to/crossing paths with someone whether they know about your little secret.
