Its People!

Wyatt: "We’ll open with a simple question. In your campaign, is a goblin a person or a monster? What about other intelligent, upright-walking human-like things?"

The short answer is that, well...that depends.

The (very) long answer is as follows.

I think that the most important step is to determine the function of a monster (monster here being defined as anything that has a stat block). As I've said in the past, I only design what I need to. If I need a village, I create the barebones structure that will see realization during the course of play. Extraneous bits that will never see the light of day? Fuck it. I'm all for creating story and history, but I dont sweat the small stuff unless I am very sure that the players will interact with it in some way.

So if I need a monster to function as a combat challenge, then thats what it is: monster! It is there to kill the players because the story calls for it, and thats-fucking-that. I dont sit and wonder about the why's or whatever for the same reason that I dont wonder if my wizard would actually have learned scorching burst back in the academy. I fucking want that spell, and so I have it.
Generally speaking these guys arent going to get a lot of screen time, so I dont flesh them out very much (if at all). I may be tempted to make a kind of personality structure that I can apply freely to, say, a gnoll on the off chance that the party might interact with it, but I'm not going to spend a lot of work on the stuff that the players are going to just kill and forget about later.

If I intend for it to be interacted with, then I prepare a name, basic personality and goals, and perhaps some sort of a vague history depending (again) on whats required. If I dont think its past will crop up, then I'm likely to just wing it. Overplanning can both end up being a considerable waste of time when spread over the course of a shit-ton of NPCs, and it can also lend a sort of rigidity to how you arbitrate player interactions (ie, get you married to a concept or course). Again, if I spend a lot of work on a NPC and the party just plows through it without so much as a glance, I can just lift the story from that monster and apply it to another one later: I'm a believer of recycling more than just statblocks.

So, I think that monsters can be treated like people. Its not an either/or scenario. I'm certainly not against elaborating on their culture and histories, if they are going to be key players. Eberron is kind of a broad example in that there are two nations of monsters (one is mostly goblins, though). It would be ignorant for players to assume that they are just monsters to be killed. Well...they can be, but they are also much more likely to be willing to talk (or be used as player characters).

On a somewhat related note, I think it is important for players to know that A) there are cases where they can talk their way out of a fight, and B) that it can actually be just as good for them to do so. See, here's the thing. If I confront the players with a gang of goblin bandits that want to loot them, they probably arent going to stand for it. Now, the players could try and bribe them at the cost of some gear/money (resource lost), but they are likely going to prefer the direct approach of slaughtering them, keeping their shit, taking potential useful shit, and garnering some XP for their troubles (several resources gained).

Oh, and maybe even C) not everything in the Monster Manual exists to be implicitly fought.