The Karma System protects players from the abuse of PvP by punishing griefers. In it's simplest form, it's basically a point system made up of Karma Points that the attacker, so called Aggressor, accrues for attacking and killing other players.
When killing a player the Aggressor receives Karma Points. The amount of points rewarded depends on the difference between the level and equipment of the Aggressor and the defeated player. Upon reaching the max amount of Karma Points the Aggressor will become Criminal which is a status that makes the player hostile to all and is forbidden from entering cities and towns. The Criminal status is achieved by killing about 100 players of equal level. Dying as a Criminal will result in loss of an equipped artifact or weapon. Karma Points can be lowered by completing various in-game tasks.
Relationships between players are defined by 4 hood colors, white, green, yellow and red.
Neutral players that are 3 levels below. Criminal status is instantly achieved if a White player was attacked and killed.
Party and raid members. Those players cannot be attacked.
Neutral players that are not affected by AoE skills and can only be attacked if the Aggressor has PvP mode enabled. Attacking and killing a Yellow player gives Karma Points.
Hostile and Criminal players. Honor Points are rewarded for attacking and killing a Red player instead of Karma Points.