I remember hearing that the higher your fame or whatever the term was the more the NPCs will likely spread the word about your town or you can talk with NPC's and "gossip" such as mentioning things about your town.

fame, low taxes, thriving economy, low crime are all things that might contribute to attracting NPC's to come to your settlement

in depth details are yet to be discussed, but i believe from previous conversations that what i listed help, though they are not the only factors

Got it, the question is, do I have not notify NPCs that my settlement is great to live in, or will they automatically find out (word spreading without my involvement). It would kind of suck to have a very developed town with low land costs, zero taxes and plenty of job openings and then have absolutely no one show up to populate it because they don't know it exists.

I got the impression it was automatic that NPC's would spread the word but I think it all boils down to whether or not NPC's in your town travel to other places or others travel to your city.

From the Q&A Video on Settlements, Caspian said that NPCs will be driven by a hierarchy of needs like food, clothing, shelter, security, etc. So if you create jobs in your settlement, they will come to you looking for jobs provided their hierarchy of priority needs are met first. They can also be attracted to the fame of your settlement. In regards to jobs, you can't offer them contracts. NPC will provide you their own contracts which will state the terms. To kick them out from your settlement, you can disrupt them from fulfilling their needs or by increasing taxes, etc. Also, I recall building roads to connect settlements will help attract NPCs. This to me is beginning to sound like a game with micromanaging RTS elements. (hehehe)