Wow. Master, are you a wizard?”— Xiao
Xiao is a main protagonist and works closely with Toan. Xiao is the only character that is capable of jumping over gaps in the game. Xiao is actually a stray cat Toan found in the Divine Beast Cave in Norune Village, who then becomes a Nekomimi (cat girl) through a Changing potion that Toan receives from Seda.
Xiao first appears as a stray cat on the second floor of the Divine Beast dungeon. In there, she is a brown tabby cat wearing a gold bell. When she encounters Toan for the first time, she seems to have a fear of him, running off at first glance. However, as he continues to encounter her, she begins to grow a curious interest in him, often hesitating to take a closer look at him before fleeing.
Xiao is the first ally Toan earns in his party. When Toan reaches the eighth level of the Divine Beast Cave, he meets Seda, who challenges him to a duel, which he loses. Seda then summons a beam to thrown at Toan but the noise seems to affect Xiao, who had mysteriously sneaked in. Toan, in an attempt to protect her, blocks the beam.
After Seda leaves, throwing him a Changing Potion, Xiao then finally trusts Toan, and is transformed into an Atla by the Fairy King. He then adds her to his home as with any other Atla, When he enters his home afterward, he soon transforms her into a cat girl. Apparently, she is helped out of her shell, and soon becomes rather attached to Toan, calling him "Master" affectionately and seizing him by the waist to give him a hug after he accepted her as his first ally. She promises to help Toan with his adventure and becomes a reliable character throughout the game.
Xiao becomes very helpful during gameplay, as she is able to jump over wide gaps that Toan can't, and she is also the key ingredient in defeating the Divine Beast Dran. Xiao can use a variety of slingshots to shoot down Dran and allow Toan to hit him with his sword. Xiao plays a very important part in the game.
In the epilogue, after the credits, she is briefly seen with Toan in her cat form returning home to Norune Village. Toan glances at her and then smiles, they then start to race each other home, thus ending the first game. Besides that, when playing in the Post-game she is seen in her humanoid form again and is playable like she was before. This could mean she was either temporarily turned back or she can switch forms at will.
In her "human" form, she has cropped auburn hair with cat-like ears, wears brown boots, a golden cat-bell, a short white dress that barely touches her mid-thigh, and black shorts underneath her dress. Xiao also maintains other feline features including her claw-like nails and her fang-like front teeth, noticeable during her initial dialogue with Toan.
It may have been obvious Xiao has taken a liking to Toan after she is saved by him, becoming quite attached. This is proven when she hugs him by waist and calls him 'master.' She is loyal to him and promises to work with him throughout the game.