If you read too much of the below, you will perform much better in combat. As an experienced player, that means you probably may want to increase your difficulty setting.  These insights make playing the game easier, it can overcome a perceived misunderstanding but can also give you much more knowledge than an adventuring party would normally have. The game can be played intuitively as well, and while you may not understand everything fully under that approach, the game is generally quite forgiving up until you reach the first boss.

Also, please be mindful that fight mechanics are a choice. I chose the ones below; you may have chosen or preferred it slightly differently. If you have suggestions, reply below, I will consider them, but most likely will not make radical design changes to these.

Flanking matters for accuracy and evasion. If your fighter is next to an orc, a 2nd player attacking him will benefit from the orc’s reduced ability to move or see the attack coming. So this is true for ranged and melee attackers. Same happens to players.

Flanking benefit is enhanced if the attacker is good in the ‘no escape’ skill. Rogues, assassins.

Flanking impact to the attacker is reduced if the attacker has the ‘nimble’ skill. Like monks or rogues.

Ranged attacks that use the full range of the weapon have the accuracy reduced. One third or half range usually stops giving penalties. And, ranged attack experts like archers and marksmen (and to a small extent rangers and samurai) have the passive MARKSMANSHIP skill which rewards high accuracy with extra ranged physical damage. This makes archers very superior in ranged attacks to fighters or rogues, who don't have that skill but otherwise can equip most ranged weapons. The marksmanship skill increases not from use or from trainers, but from levelling up. Archers and marksmen get one point every level, samurai every 3rd level, rangers every 4th.

Physical armor works as follows: first, for every 100 points of armor the damage gets halved. Then, for every 10 points of armor the remaining damage gets reduced by 1. This is calculated for each of the 3 physical damage types separately (slice, pierce, force) then added up.

Example 1: a rat has an attack that rolls a pre-armor pierce damage of 10. It hits your player who has 50 points of armor vs piercing (pretty good for an early party). First, the 10 reduces by about 25% (0.5 to the potency of 0.5), so 8 points left. Then 5 points reduced. so he takes 3 points of damage.

Example 2: a dragon charges your level 40 knight. raw damage is 300 force damage. He has 200 armor vs force damage which is amazing (armor vs force is the toughest to accumulate). This means the damage is halved twice, to 75. then reduced by 20. So he takes 55 damage.

Example 3: a dragon charges your level 40 priest. he is DEAD.

One of the consequences of the above is that a monk for example (who will never have a great armor rating), better not try and fist fight an ogre, unless he has a very high evasion and good health to survive at least one hit and retreat and be healed. Armor Class in DnD for example works differently: it describes if/whether you will be hit.  The armor class in DoC instead describes what happens WHEN you are hit.

Some classes, like fighters and warriors, can get proficient in the military tactics skill. This skill represents the finer tactical wisdom that legendary fighters have and can teach others. Something you generally do not learn yourself just from use. Every proficiency point increases physical melee damage by 1%.

Base speed determines two things:

a) How fast you can move, or to be precise how long you are inactive after you moved.  The base speed is displayed in your character sheet.

b) the base speed modifier for your weapon attack.  The player's base speed and the weapon's base attack time, and the chosen weapon attack style, together determine how fast you attack (e.g. how long you are inactive after attacking).  Only the attack speed based on a simple weapon attack style is displayed in the character sheet though, so you can't see the exact speed figure resulting from your weapon attack style.

In DoC, magic users cast spells by performing mental tasks. The time it takes to cast a spell is NOT affected by their base speed. There are different ways how RPGs may be constructed in terms of a speed system, but in DoC casting spells is not a matter of waving your hands as fast as you can. When you get more proficient at a spell, you will reach certain spell levels. Usually, every 10 proficiency points your spell level increases by 1. The higher the spell level, the better the outcome and usually you also get better at understanding the workings of the spell and are able to gradually cast it faster than at lower levels.

Resistances stack like layers: if you have two rings that grant 50% fire resistance each, then your fire resistance from items is 75%. (the exposure to fire is initially 100%, and then halved by each ring, to leave an end exposure of 25%).

For fire, lightning, magic and life-draining, resistance reduces the damage received from that type of attack.

For cold, damage reduction applies but also the COLD condition is not as strong, which slows you and is explained in more detail later.

For poison, the initial and ongoing damage is reduced, which effectively shortens the duration as well.

For paralysis and critical hits resistance, the % determines the chance that you do not suffer the impact that is otherwise coming your way.

Some birth feats reduce your resistances. Sometimes the inherent resistance before items, sometimes the total resistance even after items. The FEAT guide explains each, and some abbreviated info is given when you select it during character creation.

Some monsters can steal life, so a % of damage dealt heals them.  Players can also get this via some item properties. Lifesteal % is different from life draining damage.  Life draining damage is just a type of damage, that you can have resistance again as well. and boost with 'resist evil'.

Lifesteal is a separate feature that some monsters have, like vampires. it is commonly the attacks that also deal some life draining damage that have lifesteal on, but that is not a must. Ghosts do life draining damage without lifesteal.

A critical hit results in damage being 100-300% of the max damage, and armor class of the target is halfed.  This HURTS. If you read the section about armor impact, you will understand this far more than doubles the resulting damage, on top of the above damage bonus before armor. 

A monster or player has a critical hit chance.  A lot of monsters have zero, because otherwise you get too many frustrating insta-kills too early.  Where there is a critical hit chance, it is a simple % and if the attacker is successful in rolling it, then there is a simple % resistance (0-100%) calculated to see if the recipient can avoid the critical hit being successful.  If the resistance roll is successful, it reverts back to a normal hit.

Every monster and player can in theory be under the following conditions, several at the same time possibly: BLEEDING, POISONED, PARALYSED, STUNNED, ASLEEP, FROZEN. They all have little symbols in any of the four corners of his tile to show it. Just covering one of the more complex ones today:
BLEEDING (symbol: red drop). Some monsters can’t bleed, and in the LOG view (top right button in map view), you will learn who they are. In general: elemental earth/stone creatures, skeletal or ghostly creatures can’t. Once you bleed, you need to use magic or a similar healing power to get rid of it. Else your bleed counter will cause you damage every few ticks. You don’t see ‘ticks’ in fight mode but that is how time works in the background. A movement for a beginner player usually takes 80 ticks. You usually bleed about every 20 ticks. For some monsters, their massive health and regenerative abilities means that just having a tank that sustains all the damage and someone slowly stacking bleed-inducing attacks can work to take him down.

Note on BLEED TRIGGER: for your normal attacks, you can see the ‘attack’ stats in party view mode, it will say ‘chance to cause bleeding’ with a %. If you hit with your attack, a roll is made between 0..100 and if it is below that %, you caused bleeding. Bleeding added is 1 for every 25 points of damage, but a minimum of 1. Example: your assassin uses a ‘obsidian ceremonial knife of cutting’. This is an item with high ‘cause bleeding’ chance plus obsidian gives another 25-40% plus ‘of cutting’ adds more. So you probably have a 90%. The knife does not do a lot of damage, probably only resulting in 2 to be added to a bleed counter of the target on hit, but because the assassin is quick and using a very small (=quick) weapon, the result is that he is making a swiss cheese out of the enemy ogre. Even if he has to retreat and recover once in a while with the ogre chasing after him, the bleeding never stops and he is slowly winning.

Most spells or healing skills will heal some bleeding, higher skill/spell levels would be more effective. Some monsters like trolls have natural healing abilities that not only recover health quickly but also heal wounds. So the before mentioned breaking-bad-toothbrush-in-prison assassin build is no good here.

PARALYSED (symbol: person bound by yellow ties) - this is usually some supernatural ability or spell that someone falls prone to. It means the monster or player cannot act, and has evasion vastly reduced. Your ‘timer’ does not progress so if you are waiting for your next turn anyway because you took a big action, being paralysed prolongs the point by which you are active again.

SLEEP - not currently implemented (not applied by any player or monster attack), but if you are asleep you can be awoken by damage or heal spells.

STUNNED (symbol: red X) - works like paralysed but is caused by physical impact, in particular physical force attacks, strong monsters, special charge attacks or blunt weapons. Or the repulsion skill. The only resistance there is against a STUN attack (because it is so fundamentally physical) is the BERSERKER’s WILL skill. The skill creates an equivalent % check to see if STUN impact of an attack is ignored.

POISONED (symbol: green drop) - each entity has a poison ‘ticker’ or ‘counter’. If you are hit by an attack with poison damage, this is added to the counter at a factor of (1 - resistance %). So 10 poison damage turns into 6 being added to your poison counter if your resistance is 40%. Every few ‘ticks’ in combat (and usually several times in between a normal attack time), the following happens:

a) you receive damage equal to the poison counter
b) the poison counter reduces by being multiplied by (1 - resistance %), but at least reduced by 1.

This has 3 very interesting effects:

1. an entity with high poison resistance will take hardly any damage. Example: you hit a monster with 80% poison resistance with what looked like a powerful ‘poison dart’ spell. He takes 20 damage, then 4, that is it. Obviously underwhelming and to be expected.
2. an entity with low poison resistance will take a lot of damage (but over time). Example: same dart shot at a monster with zero resistance will cause him 100,99,98,97 … 4,3,2,1 damage. A total of ~5,000 damage!
3. hitting someone with a bit of poison damage once in a while is much less efficient than if you can stack it. Example: you hit a monster with zero poison resistance with your toxic dagger, but a lot of time passes between hits. 10 poison damage, means 10,9,8,7,6,5,4,3,2,1 = 55 damage. you do that 3 times, gives a total of 165 damage. not bad of course. but if you have 3 people hitting him at the same time with such a dagger, he would take 30,29,28 … 4,3,2,1 = ~465 damage. About 3 times more!

So key to killing with poison is: preparation, timing, positioning and focussing on the same target. and using DETERMINATION when you know your POISON BOOST will run out soon.

COLD (symbol: blue snowflake) - this condition means you are slower than you normally would be. It stacks as well, and is capped at reducing someone to snail speed. That snail speed is a fixed speed, not a % of normal speed. So if you REALLY freeze an orc to the max, and REALLY freeze a gnome to the max, they will be on the same snail speed. Whereas under normal conditions a gnome is much faster than an orc. Cold effect reduces over time, and cold resistance BOTH reduces the impact you receive when hit, as well as the speed by which it reduces over time. Basically, don’t try to freeze an ice demon or even a troll, they are just not that vulnerable to it.