How to Make a quest based system?

You have to take your idea and break it down into smaller steps. ex:

• Give players experience, inventory, and quest(s) variables when they enter the game
• When they approach an NPC, start a conversation that can lead to accepting a quest
• If they accept the quest, add it to their list of accepted quests and have a script monitor the player's progress
• When the player finishes the quest, reward them whatever the quest is supposed to reward them

To do all this, you'll need to know about events, tables, and writing your own functions. It may also be beneficial to know about writing your own classes (so that you can represent a Quest in your code); you can see two different styles being compared here