As the level of greed increases in Isilmerald, encounters with insane characters occur more frequently. You can, however, slow down this process — or speed it up if you prefer. This is because your decisions also influence the state of the kingdom. Being greedy may be beneficial for your party in many situations (such as taking all gold offered by a knight as a reward for completing his quest), but will eventually result in long-term, systematic consequences caused by the worsening state of Isilmerald. The video below showcases one such example. It's up to you which approach you will prefer.
Map of Isilmerald