Can NPCs fight each other when not in battle mode

[Asher Levin]

So I wish a village to show a battle between NPCs (no one wins or loses - just a part of the 'look'), whilst my character walks around a village.

Is this possible?

 

[doranikofu]

try to create a short animation with a few sprites. Use that as char sprites and turn on stepping animation.
For example, if you loop animation of the default map sprites of NPC (also fix the direction), they will be stepping at the same place. Switch the stepping animation to fighting animation and you will have what you need.