maybe its actually in order of when you do things for them?
I thought about that, too...
For my day 330 savegame the list shows (top to bottom)
^Bernard, Logan ... Caleb, Gunnar ... Julian ... Arion, Harold, Korg ... Othra, Rhot ... John$
That can't be chronological since my PC met Arion, Harold and Rhot way before Julian (which appears "earlier" in the list). As well Rhot was close way before my character freed Korg from the succubus' claws (Korg appears earlier on the Relations list as well).
I guess only Hyao could give a well-founded answer here. For me - if it's not chronological and not ordered by region* ** then it does not matter how the list is ordered.
* I see no benefit for the player other than getting a hint where an NPC can be found but there is no visual element that shows where a region starts and ends in that list and the names of the regions are not displayed either. ** Ordering by region could be the result of the way the game is implemented, the way Python works or the tools RenPy gives to the game developer.
The list of items in the chest screen (available in the teachers hut) is sorted alphabetically by default but I don't know how items are saved - there might be a simple list internally (Python/RenPy) which would make an alphabetical sort operation very easy or you could even insert an item in alphabetical order when it is put into the inventory. I don't know Python so that may all not be the case and I don't know RenPy either. Or maybe it's easy and you can just ask Python / RenPy to give you all Names (and references) for all objects of the type NPC.
Whatsoever, the entries are in the order they are now for a reason. I'm not asking for an alphabetical list by default but a way to order the NPCs that belong there alphabetically would be really useful.
This is more work for Hyao and although enhancing the user interface is in the TODO list there will be entries with higher priorities right now.
Just to say it once:
I'm really grateful that Hyao creates this game! The same applies to the other content providers!
The game is already addictive and very enjoyable and it has a lot of potential. I can't think of a game with similar characteristics that offers this much and is free ... made my only one programmer and a bunch of artists.