I think the people are real and all know each other (well, mostly) but they're told to go to certain places and have certain conversations which will just happen to be filmed. This might be hard to believe but it's actually more ridiculous now than it was when it first started. I think it pretty much is all completely scripted now and played out by terrible actors. Speaking of which, you should try and catch Mark Wrights (ex Towie) new show. It's so awful you can't help but watch it.