Friendship
Friendship can be measured by the amount of relationship hearts that a player has with an NPC. These relationship hearts can be gained by doing quests (all NPCs) and giving gifts (only romanceable NPCs).
Currently, relationship levels are only shown for romanceable NPCs, all other townsfolk have no indication until the player reaches 5 hearts with them. Many of the townsfolk have an in game mail that they send to the player upon reaching 5 hearts.
Romance
Sun Haven has many romanceable NPCs, in each of the regions throughout the game. The player can do quests and provide gifts to these NPC's to begin dating, and eventually marry.
Universal Gifts
There are several types of gifts that are generally regarded as universally loved, liked, or disliked. However, some romanceable NPCs override this with their personal preferences. Always check the "gifts" section of a romanceable NPC's page for overrides.