You have to perfectly describe and break down the command into an algorithm so it can do stuffs. That's pretty much the logic being used here. The On/Off looks more like a state in this case, a boolean logic, mainly used in "if-do case" condition for me. I haven't learned XML yet so when I do dialogue, I just save "Convo1 2 3" value as "True or false" and create conditions there to determine what the NPCs will say. After all, NPCs don't request the whole quest line again on the next time you decide to talk to them.

But yeah, an algorithm is crafted from many different logic combined. You know the programmer joke

"Get one milk, if they have egg, get six" right?

Human thinking : "Yeah, get milk. If they have egg, I also get 6 eggs"
Computer : "If they have eggs, get 6 milk. If they have no egg, get 1 milk"

The way we communicate constantly evolve. Shortened words, statements and slang happens. We understand this but computers don't. They are bound to mess up. Creating the right function, algorithm and statement to make sure the computer doesn't mess up like the above is what you will be learning for basic. Instead of writing the above statement, if you include the basic, you will probably say

"Get one milk. If they have egg, also get six eggs." instead to make sure the computer doesn't mess up.

I had taken Algorithm class and a class that pretty much force you to code a program to solve over 150 different basic and complex problems along with patterns so I can somewhat help you with stuffs to make programs cleaner, faster and work properly.