I have some friends marked as inactive, but can still gift and receive gifts from them, so what makes them inactive?

By inactive do you mean that they have no wish list up or that they are showing red?

If they show green but have no wish list it usually means that they are still playing but have nothing they need for the time being.  It can also be that they have a low level "feeder" game to help a higher level game as well as friends.

If they show red it usually means that they have not been playing for at least 7 days.

However, in the world of Midnight Castle, sometimes there can be a slight "wrinkle in time" where a glitch will happen and people will show red but still be active, or show green but be inactive.  This usually happens at the turn of the year, at least on my game, where one of my original friends, our beloved Robyn's games will show active even though it is impossible for her to still be playing.

Tks that does explain my confusion, I was referring to friends that show red but I still receive gifts from. Guess I'll just use the red/green as a maybe and see how players respond. Tks again.