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Karma is a measure of the character's lawfulness. Various actions may increase or decrease karma.

At negative karma, the player is treated as a criminal, attacked on sight by guards, and many shopkeepers will not do business with you. This can be temporarily alleviated by casting incognito, either as a spell or from a scroll. Vendors in the thieves' guild reliably have scrolls of incognito in stock.

The only safe haven for a criminal is the town of Derphy.

Actions That Increase Karma

Action Value
Complete a quest 1
Freeing believers being held by fanatics 2
Complete a nefia 5
Return a lost property 5
Read a letter of indulgence 20

Actions That Decrease Karma

Action Value
Theft (pickpocket, consuming owned items) -1
Vandalism (destroying items, walls and floors, harvesting owned crops) -1
Kick a sleeping friendly NPC to wake him up. -1
Killing a cat -1
Forcibly taking property belonging to a pet -1
Eat a cat meat/egg -5
Murder (named NPCs, citizens, guards, etc) -5
Fail a generic quest by letting it time out or abandoning it -3
Fail an escort quest -4
Fail a delivery quest -15
Open a lost wallet -8
Tax evasion -40/month