How does Counterspell work and can it be used on Silence?

Question

Can Silence be Counterspelled?

Silence: For the duration, no sound can be created within or pass through a 20-foot-radius sphere centered on a point you choose within range. Any creature or object entirely inside the sphere is immune to thunder damage, and creatures are deafened while entirely inside it. Casting a spell that includes a verbal component is impossible there.

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Counterspell: You attempt to interrupt a creature in the process of casting a spell. If the creature is casting a spell of 3rd level or lower, its spell fails and has no effect. If it is casting a spell of 4th level or higher, make an ability check using your spellcasting ability. The DC equals 10 + the spell’s level. On a success, the creature’s spell fails and has no effect.

Let's take a few specific scenarios before you just tell me Yes of course.

Issue 1: First off the NPC would have to know a Silence is being cast. How would they know this until its too late?

Issue 2: Would it depend on position and environment? Say my character is on the other side of the room and there's melee going on. Likely to not hear. Vs standing next to the NPC Caster and its quiet. I guess in that case they could potentially understand what spell I'm doing?

Issue 3: Would having Silence themselves play a role? What I mean here is I could see if a Wizard NPC has Silence and Counterspell ready then perhaps they recognize Silence as I cast it. If they don't know Silence though then how would they know what random draconic I'm uttering?

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Some of this may be broader mechanics of Counterspell - namely should the DM know what's being cast before deciding to Counterspell and how would they? And specifically how, if at all, could it be used on Silence?

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Backstory for anyone that may care: DM was telling us all week to be ready for an epic fight because we hadn't had one in a while. She rolled low on initiative and I rolled well enough. I cast Silence and she did not counterspell it. She was then all bummed because we killed the Wizard before he could get a single hit off (our Fighter crit him and Paladin knocked him prone). She blames herself for not using Counterspell. The more I think about it though the more I don't know how she should even be able to have used Counterspell.

Answer 1

To sum up the mechanics of counterspell:

If a creature with counterspell available can perceive any spell within range being cast, they can attempt to counter it. They don't need to know what spell it is, or even have it on their class list to make the counter. Based on this, and what I gather from your context, the short answer is: yes the NPC could have cast counterspell.

Let's tackle the issues one at a time with this knowledge:

Issue 1:

The NPC doesn't have to know that a silence spell is being cast. All they need to know is that a spell is being cast at all. Counterspell counters any spell after all. How would they know that a spell is being cast? Because silence has verbal and somatic components. So, as long as the NPC can see or hear the caster casting something, the NPC has the option to counterspell it.

Issue 2:

Yes. It's been established in the Sage Advice Compendium that (emphasis mine):

If a spell that’s altered by Subtle Spell has no material component, then it’s impossible for anyone to perceive the spell being cast. So, since you can’t see the casting, counterspell is of no use.

So, if the NPC can't perceive the spell being cast, then they can't counterspell it. In most circumstances (casting during combat or from a different room) it's up to the DM to determine if the NPC can perceive the casting. But if the DM rules (or is convinced) that the NPC can't perceive the casting, then the NPC can't counterspell. In this case, I assume that the NPC could see you casting, and you were within range, so counterspell would have been a legal reaction.

Issue 3:

It could, though it doesn't have to. There are some optional rules that allow creatures to identify a spell as it's being cast, but those are... well... optional. Unfortunately, the DM just has to make a call on what this particular NPC would do, and stick to it. There is no rule pulling the decision one way or another. It's reasonable for the DM to rule that the NPC would take the risk and not counterspell whatever you decide to cast. But, it's just as reasonable for them to rule that the NPC would assume that any spell you cast is a threat that can't be allowed to pass, and so would counterspell it regardless of what it turned out to be.

Issue 4:

Technically, a creature doesn't automatically know anything about the effect of whatever spell a different creature is in the process of casting. But the rules are, again, silent on this matter beyond that. So, if the group decided that minimizing metagaming is something that they want to strive for, neither they, nor the DM should know what spell is cast before deciding to counterspell. But that is a conversation that you all will need to have as a group. Some groups are more lenient where everyone knows what spells are being flung around. And still others let the players know what the enemies cast, but not the other way around. You all have to decide for yourselves what would be the most fun.

Answer 2

First off, of course you can counterspell silence. But I think your real question revolves around whether/how one can know what spell is being cast, when deciding whether or not to counterspell.

The PHB and DMG do not give guidance on this.

Notably, the PHB at "Using Ability Scores" mentions identifying a spell while casting neither in discussing the Arcana skill or the Intelligence attribute. Now we all know those are not intended to be exhaustive, but rather representative lists, but the omission of such a commonly-wished-for ability is, in my opinion, notable.

The DMG is mute both on the subject and on nearby topics.

Xanathar's Guide to Everything has some guidance for this.

"Identifying a Spell" on p.85, tells us that one can identify a spell as it's being cast. (Note that this is in the "Dungeon Master's Tools" chapter, which presents explicitly-optional rules for you to use, if you like.)

Some of the relevant points are:

• a character uses their reaction to
• make an Intelligence (Arcana) check
• with a DC equal to 15 + spell level
• with advantage if the observer knows the spell as a result of being the same class as the caster.

So this largely covers your issue 1, how to know what spell is being cast. Problematically it requires a reaction, as does counterspell. So by these rules to both identify and counterspell you'll need a "spotter" and a counterspeller. (But lots of people have lots of unused reactions to donate to the cause, so I kinda like this wrinkle.)

Issue 3 is also covered, both in that you're explicitly given advantage for one way of knowing

For issue 2, I look at the "knowing" mechanic of the 4th bullet and now have an easy template for how to add other bonuses/hindrances if I see fit. Noisy environment/obscured view? Just disadvantage the roll. Subtle metamagic being employed? Raise the DC. &c. &c. &c.