Stats

STR (strength) determines the power of your magic attacks. It also determines ATK (attack) for most weapons, which affects the damage output of normal attacks. For most weapons: STR + weapon POW (power) = ATK.

RES (resistance) determines your overall defense. It is combined with armor BLK (block) to determine the DEF (defense) stat. It's separate from the DEF stat because some attacks ignore armor and are calculated directly against RES. Piercing weapons do this against enemies, for example. Magic ignores DEF and RES entirely. It's dealt directly based on the attacker's STR.

AGL (agility) determines your hit rate, evasion, and affects each combatant's turn during the battle round. Those with high AGL tend to go first, but it's randomized, so not always. Furthermore, the higher a defender's agility is compared to an attacker, the more likely the attacker is to miss. Agility-based weapons determine a character's ATK using AGL instead of STR. For agility-based weapons: STR + weapon POW = ATK. Soel ends up with high AGL, which is why agility-based weapons tend to work so well for him. (developer quote)

Spells

Spells are learned from hermits in hermit caves. To use a spell in combat, the cost is your HP. There are a few items that mess with this mechanic (like the Survivor Pendant, which allows you to cast regardless of cost, reducing you to 1 HP). Spells are subject to combat initiative and agility.

Each character has basic spells and an advanced spell. The advanced spell can only be learned after mastering the lower spells.

Spells gain exp : "When you use a spell at least once during a battle, at the end of that battle the spell will receive TOTAL ENEMY EXP / NUMBER OF ENEMIES to its internal counter."

Each basic spell has several levels that it progresses through before it is mastered. Each level has differing effects (Damage spells become stronger, the Purge spell affects more status ailments, etc.)

As a note, the current run uses Tachi's Advanced spell, Astra. Astra does high non-elemental magical damage to all foes, and is affected by STR.

Combat Items

There are various combat items that deal fixed damage ranges, heal the party, cause debuffs, or cast spells without cost. Combat items will always process first in a round, and are not subject to combat initiative and agility. Straight damage items are fixed and not affected by stats. Scrolls are affected by STR, in a similar way as Magic damage is.

Of note:

The Glass Orb is the highest tier damage item, and does nonelemental magical damage instead of physical damage.

Marks of Will and Marks of Mastery multiply the experience gained in the current combat by 3x and 7x, respectively.

Ambrosia grants an additional 100 current HP--this can go over maximum. If combat is ended before the buff expires, the buff lasts until it wears off. Ambrosia may be used once per combat, but with the lingering buff, you can stack a couple hundred extra additional HP in certain scenarios.

Passive Items

From exploring and completing subquests, the player can find various items that provide a passive benefit while they are in the inventory. The current run uses an item called the Herb Pin, which makes all healing items heal to full HP.

Chief Blessings

The chiefs of the various clans, when given tribute, grant two bonuses. On first tribute, the chief will grant what is usually a small stat bonus to either an individual party member or the entire party. The second effect is a temporary experience gain bonus. This bonus stacks with the combat items Mark of Will and Mark of Mastery.

Defending

Defending in combat reduces all incoming damage and heals for a percentage of the health of the user. The damage reduction is immediate, and the health regeneration occurs at the end of the turn. If the user is weak to an elemental damage source, that source will bypass the damage reduction and still deal "critical" damage from weakness exploitation.

Omni-Battle System

Both the player party and enemy party choose one action per turn.

If attack is chosen, then all members of the selecting party do their respective attacks to all members of the other party, with turn order based on weapon initiative and agility.

If a spell is chosen, the spell is applied to all members of the other party. This is subject to initiative and agility, if the user does not have the HP necessary to cast the spell at the moment their turn is up in combat, the spell will fail.