PC Exact mechanics of NPC being too close together

[Matthew Cline]

An NPC will become unhappy if there's more than two other NPCs within 25 tiles. I have two questions about the precise nature of this:

1. Is it 25 tiles between the edge of each NPC's house? Between the center of each NPC's house? Between where each NPC is currently standing? Or what?
2. If the NPC's are separated diagonally rather than vertically or horizontally, how is the distance computed? Euclidean distance? Taxicab geometry? Or what?