On to the second sub-question:
What does ‘drama’ entail within a game?

What does drama entail at all? The word derives from the Greek word δρᾶμα, which means action. It derives from the verbs to do or to act. Which seems to imply that in drama, things happen. Further glances tell us that “The enactment of drama in theatre, performed by actors on a stage before an audience, presupposes collaborative modes of production and a collective form of reception.”
That’s all very well. Drama is something where things are made to happen in a collaborative effort to be consumed or spectated in a collective fashion. And that’s just dramatic theatre. Would I would like to do in this article is attempt to distill which active elements within ‘drama’, whether it be theatrical, cinematic or something else, are present in video games, which aren’t, and which of those that aren’t could conceivably be transposed into a video game context that realize the sort of advanced puppetry I’m currently envisioning as the end result of this project.
As mentioned previously, a lot of definitions mention, in some form or other, ‘collaborative modes of production’. In a lot of cases this refers to the gesamtkünstlicher nature of theatrical productions, and the ensemble of creators necessary to facilitate it. The writer, the performers, set designers, builders, a small army is required to play out the drama contained in a play. Similarly, we can steal the definition and hereby propose ‘collaborative modes of production’ could also refer to players. A multiplayer game is nothing if not a collaborative mode of production, the production being the final, unique experience of gameplay, the mode being the actual play, and the collaboration the very fact that two or more players are interacting with one another in a designated arena.
But can we say that presence of X systems guarantee a Y amount of drama? How much is 1 drama? Can you have too much drama?
The problem is that, much like improvised drama, most significant interaction will take place between players, who are, contrary to the system, complete mechanical unknowns. There is no sure way of predicting the totality of player actions, which is at once what makes it beautiful, but hard to encapsulate from a designers’ standpoint. This means that there is no true guarantee of a coherent story or even something that is interesting. Somehow, the means available to the players must be constrained to simultaneously imply a sufficiently large range of expression, as well as conducive limit that challenges them to reach beyond what is offered and start to create situations themselves.
When a player kills another in a game it is a nuisance for the receiving party. But it is not necessarily dramatic. If the two players concerned were on the same team, and this killing was in fact dramatic, this contextualizes it as dramatic, but as long as this is not sufficiently backed by the players’ performance, it is simply tomfoolery. So, how can the environment and the programming aid in contextualizing players’ actions as those of a dramatic nature?