The first cRPGs were based on D&D, a game in which a player character was defined as a page of numerical skills/stats. Those skills/stats were challenged by formulas, in everything from combat to conversation, even walking across a slippery floor. Have high dexterity? Higher chance to walk across that floor.
Characters in such systems grow in response to their adventures by leveling, at which point their skills/stats increase (and sometimes decrease) at the player's choice, sometimes at the dungeon master's, in response to special quests and challenges, or even automatically. Leveling is thus most commonly represented by EXP points, though other forms of leveling exist.
cRPGs do not need combat, inventories, dungeon exploration, towns, neutral NPCs to talk with, or anything else as long as these core mechanics are met: player character based on quantifiable skills/stats, complex game formulas which rely on those skills/stats, and the ability of skills/stats to change in response to the outcome of those game formulas. cRPGs often contain choice as well, but not always in any significant manner.
Zelda is not an RPG (meaning all computer and console roleplaying games) because the player does not have a character sheet (skills/stats), it contains no formulas that challenge the player character's skills/stats, and it does not have a complex growth system. Hearts are not experience. They're items. You find them and pick them up, just as you would a mushroom in Super Mario. Once obtained hearts are hit points, but that's not what makes a game an RPG, as every game where you can die in response to damage has hit points, either obvious or hidden from the player's view.
Nor are computer and console RPGs LARPing. That is not their heritage. Their heritage is Ultima and Wizardry, which explicitly emulated the character sheets (skills/stats), leveling systems, and game formulas of Dungeons & Dragons. Someday there may be a sub-genre or unique genre where the only thing that matters is choice and the only reward is a response to that choice, with no formulas to worry about, no skills/stats to groom, and no leveling systems (i.e. purely roleplaying and not a game), but today is not such a day. Today, cRPGs are still D&D -> Ultima/Wizardy -> Everything we have now.
RPGs are a complex genre because they are based on complex formulas. Compare with something like an FPS. An FPS is in first person and you shoot things. Simple. No, or at least few, grey areas.
RPGs are much more. Formulas dictate everything, far more than simple hit detection and health pools. Will a sword strike connect? Check the formula (factor in dex, weapon skill, stamina, sword condition). Will it do damage? Check the formula (factor in armor, opponent defense skill). Does the enemy die? Check the formula (check HP, factor in special skills, special conditions). If it does, what rewards are gained? Check the formulas (exp gained based on both character levels, roll on loot table). Does it change faction standing? Check the formulas (enemy's factions, player's factions, set flags, change values). Did the player level up? Etc etc etc.
That means that by the very nature RPGs are harder to define. They take more work to think about. Further, RPGs have grey areas, overlaps. Many overlap with adventure games (puzzle solving). Some overlap with action games. Some even overlap with FPS games. And vice versa, as games appropriate the "level up" mechanic.
But that doesn't mean the genre label is meaningless, even if new gamers are often unaware of the genre's genesis. Genre labels let us know what to expect from a game. They're useful tools for understanding what we're jumping into. Is it shooting? Is it puzzling? Is it RPG stuff?
Genre labels aren't 100% accurate descriptions of every facet of each and every product all wrapped up in one word. There will be overlap, as each game is something complex and hard to define without volumes of text. They're just quick descriptions to start us off on understanding what the general gameplay is about.
So, it takes work to describe what "RPG" means. That's fine. Some people will misunderstand that term. That's fine as well. Even if we use a new term to describe RPGs which we think is more accurate, there will still be grey areas, misunderstanding. Someone somewhere will still try to classify Zelda as an RPG. Fine.
As long as most people understand the label, as long as it is still a fit term to help most people understand what they should expect from a game, then it will suffice.
