I'm guessing the 25,000 number is Eve Online? This is different from Guild Wars though. If everyone were in the same area they would all see one another on the server. This isn't the case in Guild Wars with the different districts in town, and the instances. This allows ArenaNET to easily split the population between multiple servers and makes load balancing easy.
During the dragon festival I saw over 260 instances of the monestary later in the night when the Emperor was making one of his visits. Assuming 100 characters per district this puts it at ~26,000 people. Though the districts were very likely on different servers and thus wouldn't count for this record.
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