Combat consists of picking up a long tool and smacking other things with it.
Some things will do more damage then others, for example, an Animal Bone does less damage then a Pickaxe.
The best known melee combat tool is a Steel Warhammer.
The best known ranged combat tool is a Bow.
Combat is restricted to Players vs. Enemies on public and friends-only, non-VIP servers, but VIP servers enable PvP.