Understanding the particulars of combat is an extremely complicated task. There is some basic information to understand about how fighting works, and there are some much more intricate specifics to those who are truly trying to optimize performance.
Overall, understanding combat can be broken down into a few categories -- the hit table, how damage is dealt, the effects of generating threat, and the impact character attributes have on each of these.
This article will briefly discuss some of these concepts, but for more details, it is recommended that you check the individual topics.
See Hit Table
The Hit Table, also sometimes called the Attack Table, is the process of deciding if an attack is a normal hit, a miss, a dodge, a parry, a crit, or any other number of possible actions that can occur. Instead of rolling each potential chance individually, the game compiles all possible outcomes into a table to determine which effect will occur. Because there is only a limited amount of space, characters can push off certain effects like crushing or critical attacks and prevent them from occurring.
The damage from basic attacks are generally determined by the following process:
Example: a hunter with 700 attack power has a bow with a damage range of 100-150 with a delay of 3.0 seconds.
A critical strike for a physical attack will typically double the damage.
Spells have a slightly different process.
Example: a mage casts a Frost Bolt that has a damage range of 174 to 190. The mage has +70 spell damage.
Healing uses the same general process. All spells typically add 50% of their value on a crit.
Threat is the amount of hatred a computer-controlled enemy has built up toward you based on the actions it has experienced from you. Generally, the enemy will attack the target with the most threat. Each point of damage is counted as 1 point of threat, and each point of healing is half of a threat point, however many other actions generate threat and some damage spells have extra threat. A group has to make sure that the tank has more threat than the other members as often as possible.
An enemy will switch targets if another group member exceeds the current target's threat by at least 10%, or 30% if the new target is at range. This means reclaiming aggro once it has been ripped is not as simple as just getting to 1 more point than the other party.
Most attributes either increase damage or healing, enhance your chance to hit or decrease an opponent's chance to miss, or simply improve your character's longevity. See attribute for more specific details.