@WBYeats,
No, not exactly--the people which an author creates for a work of fiction are called fictional characters. How the author describes them to you is called character development. A poor author will not produce very believable characters. An author like Thackeray will produce characters who are very believable, so much so that one cares about what happens to them. It is not necessarily the most important characters, nor the most appealing who are well-developed, either. In the novel
Vanity Fair (usually considered Thackeray's best work), there is a character named Rawdon Crawley, who is a cavalry officer, and who is, in the language of Thackeray's day, and intensely stupid man. Crawley has had the minimum education for his profession, and is a very good cavalry officer. Otherwise, he is a fool. He marries Becky Sharp, who, although intelligent and well-educated despite her disadvantage, is an unlovely and completely amoral character. She married Crawley, thinking she'd get financial security when Crawley inherits the estate of his aunt. She is wrong, and she and Crawley sink into poverty, which is only mitigated by Becky's manipulation of others, and her adulterous affairs with whatever men she thinks she can take advantage of in order to get money. Crawley refuses to see her faults, refuses to acknowledge her infidelity until years of her conniving finally force him to face the truth.
He is deeply devoted to his son, whom he loves unreservedly. When he finally realizes that his wife has been prostituting herself, he leaves her, and takes an overseas assignment, leaving his son in the care of his elder brother, Sir Pitt Crawley, who has inherited all of the family money. In the beginning, it is easy to despise Rawdon Crowley as a bully and a fool. Over the course of the novel, however, his good qualities are revealed, as he finally awakes to the thoroughly rotten and selfish character of his wife.
So i say that Thackeray's genius is character development, such as in gradually and and in a subtle manner revealing the character of Rawdon Crowley (and the other characters) over time in the narrative of the novel. In fiction, character development takes place whether the author is good at it, or not.