A canon character is a fictional character native to a particular book, television, movie, comic book, video game, or other canon universe. A canon character may also be referred to as a canon or a canonical, though the latter is more properly an adjective.
Note: in some circles, such as the Neopets role-play forums, canon characters may be referred to as original characters, since they are the original inhabitants of the 'verse. In the PPC, however, original characters are original creations of the fanfic author rather than the canon author.
Canon Characters in Fanfiction Edit
Where there is fanfiction, canon characters are almost always involved. It's rare to find a story set in a canon world that doesn't include at least one or two characters from the original source material. Even in such a story, the canon characters may be related to the original characters in the fanfic, possibly as their ancestors (as in "spawn" fics, wherein all the characters are children of canon characters) or descendents, depending on when the story is set. For the most part, however, people who read and write fanfiction do so because they're interested in the canon characters, and want more stories about them to enjoy.
Good fanfiction strives to keep the canons in character; that is, behaving and speaking as they do in canon. Even if the fic is an exploration of a characterization not displayed in the canon, some reasonable explanation should be given for the changes. For reference, "I felt like it" isn't a reasonable explanation.
Bad fanfiction, on the other hand, often doesn't even try, resulting in canons who are out of character and don't behave like themselves, sometimes to the point that they literally aren't themselves anymore. OOCness, especially for no good reason, is one of the things PPC agents charge for during missions, and there are so many articles relating to this subject that trying to touch on every one of them here would be silly. See linked articles for more information.
Canon Characters and the PPC Edit
People generally choose to become PPC agents because of their love and respect for canon and canon characters. All agents have characters who are their particular favorites, and many have designated Lust Objects. Agents tend to get very angry when their favorites are messed with by badfic. This is bad for the Mary Sue or Sue-wraith behind the fic.
The PPC has a non-interference policy regarding canon characters, which means that agents are discouraged from interacting with them during missions and must keep the existence of the PPC a secret. They are aided in this by their disguises, which help them blend in with the background, and the Somebody Else's Problem field generated by their flash patches. They are also equipped with neuralyzers to erase the characters' memories of the badfic and the agents at the conclusion of a mission. Agents are especially discouraged from interacting with their Lust Objects. They have partners to keep them under control if necessary, and may be prescribed No-Drool videos if that is not enough.
That said, it isn't unheard of for desperate agents to seek help from canons (and then neuralyze them afterward), and there are a few canon characters who know of the PPC. These characters may be omniscient, like Aslan or Eru, or otherwise impossible to neuralyze, like Death or the Bronze Dragonflight; or they might simply have a talent for knowing things they shouldn't, like Gaspode. These characters and others with OOC resistance or immunity tend to make useful allies, since they may perceive the wrongness inflicted on the people and places around them by badfic and want to help the agents fix it.