query only returning posts with already set custom field

You can add the custom field to all of the post:

$posts = get_posts(array('post_type'=>'entity', 'posts_per_page'=>-1);

foreach($posts as $post){
    if(get_post_meta($post->ID, 'entity_person_relevance', true) == null ){
        $term = wp_get_object_terms( $post->ID, 'yourtermcat'); // see codex to $wp_error handling or just set $term to 1, 2 or 3 

        update_post_meta($post->ID, 'entity_person_relevance', $term->term_id); 
    }

}