My memory is a bit fuzzy about it, as I haven´t done it in a while, but here it goes:
Create a new game and check the "Create Spacemaster Empire" (Center Top)
You can un-check the "Create one or more computer controlled Empire checkbox, as we will create the NPRs later.
After hitting "Create Game" and waiting a bit, you will be facing your regular start-game window. Select your newly created game (if not allready selected) and hit "Select".
Select "SM Race" from the "Game" menue.
Enter SM mode
Then hit F9
You are now presented with an "empty" system screen.
Hit the "Create System" button (lower right)
Delete and create new systems until you get one you like.
Select a planet you want to be the homeworld of your first NPR and hit "Create Empire"
The "New Empire Setup" screen will pop up
Enter the name, population size, tech points and make sure you tick the "Create as NPR" checkbox (upper right)
After you are done setting all the variables, hit "Create Empire" on the lower left and voilla, you have just created a computer controlled NPR
Hint: Personally, I manuelly increase minerals on their homeworld to several millions at decent accessabilities for each TN mineral, cause NPRs are notoriously bad at managing this stuff.
Repeat until you have as many NPRs as you want.
Now, to your own race.
In the SM Menue of the main game menue list, hit the "Create Sol System".
Hit F9 again, select Earth and hit "Create Empire"
Create your own empire as you did with the NPRs, just _uncheck_ the "Create as NPR" box.
Done