Who is this character, really?
Reason #1: This is Not Amateur Night
Think about the last person you met whose work included references to actual people from the author's actual life. Chances are good that instead of Ian Fleming (the author of James Bond who based a lot of the super spy's story on WWII-era spies he worked with) you're probably thinking of that kid from your high school creative writing class whose stories were all about rebellious teens and their cartoonishly restrictive parents. Or maybe you think of that one friend you had in college whose protagonists always wound up with beautiful girls who were suspiciously similar to classmates he could never get to go out with him.
|You are shooting blanks, my friend.|
The point is that taking real people from your life and sticking them right into your story is not good for your art. It prejudices you regarding the person portrayed (for good or for ill), and you are more likely to write them as a parody than as a character with any actual depth. You rarely know real people as deeply or as thoroughly as a character you've created from the ground up, because you don't have access to all the facts and background of real people. With characters you sort of need that.
Reason #2: There Might Be Consequences
Maybe you're thinking hey, this is my story and I'm not going to let some random guy on the Internet tell me how to write. And you're correct, you don't have to listen to me. The person you might have to listen to though is the fellow in the black robe holding the little wooden hammer.
|Tough critics ain't got nothing on lawyers.|
It is not overly common for people put into your novel to sue you, but it is definitely possible. The more famous you get, and the more money the book generates, the more likely a lawsuit becomes though. Maybe the guy you made into the villain feels this book is libelous. Maybe a woman whose character was murdered is claiming pain and suffering. The reasons can vary from the legitimate to the ridiculous, but even if you win the suit there are the legal fees, the cost of defense, and the fallout the accusation might generate. It could damage your reputation, get your book panned pretty harshly by critics, and if you're publishing with a company instead of doing it yourself it could get your book pulled from the shelves.
What You Should Do Instead
Unless your book is explicitly about real people (or parodies of real people) you should not attempt to cut large swaths out of reality and paste them onto the page. With that said though it is a good idea to carefully observe the people around you. Look at how they act, listen to the things they say, and attempt to understand their psychology. If you can do that then you'll end up creating deeper, more believable characters.
|And how is that any different?|
Because plagiarism is copying down a single document verbatim. Research is taking parts and pieces from different documents and gluing them together with your own words. The former is considered bad form, and is something you should avoid. The latter, while harder, ultimately creates a better finished product that you can't be sued over.