For a full on game I have a plan to manage this sort of thing, but there will be somewhat pre-determined stories since a computer couldn't exactly write a compelling narrative. Those stories might have certain dialogue added depending on player choices to give the illusion that it's totally dynamic.
Bad Example: "Remember when we were "insert place here" and we had that conversation about "insert thing here?" It was "insert weather" that day, I felt "insert emotion here."
Meanwhile, the main story is somewhat on branching rails Telltale style with the side content being actual dynamic social simulations.