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A player character, or PC, refers to the in-game figure controlled by the player "behind the screen". Also known as an avatar or even toon (short form of cartoon figure), the PC is the focal point of the game for each gamer. To participate and play the game, each person must go through the process of character creation and create a unique figure in the game world.
Any actor in an online game controlled by a human being is referred to as a PC, as opposed to NPC's that are controlled by the server. The only exception to this rule is when a monster or other being that would otherwise be an NPC is directly controlled by a GM or developer, in which case the line between the terms blurs. Still, PC should only ever refer to "normal" players and their characters.