this Google+ Post... and thought it worthy to add to my blog...
My strategy has always been to build encounters by determining who the main NPCs are, and what their personality and motives are. They are given a limited and finite amount of resources to work with and have personal objectives. It could be, for example, an NPC is Mutmaw, the Mayor of Hobbington whose objectives are to quell dissidents, enrich his friends and supporters, aggrandize himself to the Commons, and not step on the toes of those who are bigger than he is. His immediate objective is to find a husband for his big boned daughter Gurthtruda. He has a small number of personal henchmen who do dirty deeds, and he has a set of Officials under his command, including Drake Barnstormer the Captain of the Guard, Inspector Henderson the Detective (neither of whom are bad guys, actually), and so on. So, a typical adventure might include Barnstormer, and over the course of events may wind up drawing in the Mayor. That remains to be seen based on what the Player Characters do. I don't map out an exact path through any given adventure. I simply set up the motives and objectives and personalities of those involved and then as the Role Play unfolds it reveals the story.
When the Party gets to the point where they are not in combat and are simply in RP mode then everything is pretty much conversational. The Adventure is planned by defining what the adventure's objectives are, and who is who in relation to them. So in one case there was a murder mystery and Barnstormer was a key NPC, and Mayor Mutmaw showed up. Everything was done in Role Play. When the PCs asked specific questions I rolled I roll to see if the NPC knows the information at all, then again to see what the Reaction was (1 = least favorable, 6 = most favorable). If PCs ask smart questions and do not make trouble then they get whatever answers they can and the adventure moves on. Sometimes they are unlucky and they get an unfavorable reaction, and that can lead to other consequences, including, of course, combat.
It goes on from there.
Now that said, I do also include a few social skills in my world. Diplomacy for example. And people do use it on occasions where it makes sense. For example, if they are going to try to negotiate with Mayor Mutmaw. The person with the highest Diplomacy Skill Level will negotiate. There will be a Difficulty Level according to the nature of the request, and that DL will depend on the GM's arbitration, aka GM Fiat. They then roll to find out the Reaction, and if they win the roll, they win the negotiation. Like that. Those types of events are also Roll Played because I ask the Players to tell me exactly what they say. I then assign a DL based on the effectiveness of their statements. Sometimes they put a timeout on the game for a few minutes to discuss their rhetorical strategy, and if they come up with something that makes sense they get a bonus on the roll.
That's how I deal with Social Encounters, mostly, and it's worked well for the past 30+ years. No complaints from the Players and it all runs pretty smoothly.