Socializing with other Sims is sometimes needed to pass certain obstacles or complete certain Tasks. Socializing is when you chat with a Sim until they feel comfortable for you to motivate, or ask them for things. You need to motivate many Sims throughout King Roland's kingdom to be able to restore the kingdom to its former glory and get things you need to be able to progress through the game. You'll select need to choose from several interactions in order to finish socializing efficiently without making the other Sim mad. Socializing will require some basic knowledge of the character you are socializing with. If you do all the wrong interactions to the other Sim, the Sim will abruptly stop the conversation, drop Sad/Angry essences, and you will have to start all over again (despite this, relationships will not go down, so you may try as much as you want). One example of socializing is when Elmira Clamp has an axe that your group needs so they can chop wood for a Scroll that unlocks stairs, so they can make stairs to go up a cliff and then to the harbor. She refuses to hand it over at first, but when you socialize with her and make her like you more, she gives you the axe. Another example is when Vic Vector gets cold feet before his rocket launch, fearing death. You will have to convince him to that he will become famous, an adventurer, and divert his mind away from the fact that he might possibly explode during the rocket launch.
On the top left corner, you'll be able to see the Sim's current mood from your last interaction, and below it, the interaction that you are targeting to finish the socializing task. Each interaction you do will trigger a new mood, so be careful about which interaction you'll choose! Once you have chosen all the right interactions, the target interaction will be available to you, and doing the target interaction will finish the task.
Sometimes, two interactions on the screen may both seem okay to do. For example, praising Leaf's guitar or praising Leaf's concert in Leaf's socializing task "ENCORE!" both seem to be appropriate choices that won't make Leaf mad either way. It would make more sense, however, to praise the concert since you are requesting an encore from him and you should want him to know you like his concerts. Praising the guitar will get a positive reaction, but it won't lead you to the right path in the conversation and you'll be just back where you started.