I like the Folk Hero one, but does that mean people will treat me like a hero? I'm hoping to slowly become one, but I want to start as a scared, skittish Hobbit.
No the backgrounds don't define the world reactivity, they do two things:
1. Provide you with two associated skills.
2. Define when you get inspiration points (I'll explain).
So, for almost every meaningful action in the game you roll a dice. Inspiration points allow you to spend them in order to roll two dice instead of one and choose the one with a better outcome. They basically help you to be good at skill checks when it is most necessary for you. Different backgrounds define how you get inspired. Folk Hero gets inspired when they do good deeds and help people. Soldier for example gets inspired for combat achievements, and so on.
