Health, as in any other game, represents the character's life. When a player's health reaches 0, that player dies. Health regenerates fully out of combat, and up to half of the damage taken while in combat, after a short delay.
A character's maximum health is 1000. This number does not change with level, but it is affected by fortitude. This is intended to create a more normalized experience, as well as to make everything easier to balance and compare. In other games, where both health and damage increase with level, the net effect is the same, the numbers simply get bigger. Weapon damage and armor do increase with higher level items, and these two should balance each other out, serving mostly to create a distinct tiering of equipment as well as to allow characters to become stronger as they find equipment.
When a character takes damage, they instantly lose that much health, but a residual health bar equal to half of that damage remains in a darker color, representing the maximum health that the character can regenerate up to while still in combat. Thus, no matter how long a battle goes on, and how much you regenerate, a character will die after taking at most twice their maximum health in damage. Out of combat, a player can regenerate fully. The rate of health regeneration starts at 10% of maximum health per second, and increases with fortitude. Health regeneration is delayed; that is, any time you take damage, your health regeneration is set to 0 for 3 seconds. This delay is reduced by resilience. This delay is triggered by any health loss, from afflictions as well as direct damage.