RESISTANCES give the potential to avoid or reduce damage or negative effects from certain types of attacks. They are usually displayed as a white shield, like you see on the right, with the icon of the particular status effect. The one shown here is BLIND RESISTANCE.
Resistances can be grouped into several categories: ELEMENTAL, PHYSICAL and MENTAL.
ELEMENTAL resistances are those that block elemental damage, including 
FIRE, 
ICE, 
SHOCK and 
POISON.
PHYSICAL resistances are those that block negative effects on the body or physical damage, like 
PHYSICAL DAMAGE, 
BLEED, 
SLOW, 
WEAK, 
STUN, 
KNOCKDOWN, and BLIND.
MENTAL resistances are those that block negative effects on the mind, like 
MAGIKAL DAMAGE, 
PANIC, 
SLEEP and 
CONFUSE.
Generally, most characters have no natural resistances to anything, unless they receive one that is race-specific. For example, Half-Goblins naturally have 50% POISON RESISTANCE and 15% SLOW RESISTANCE. This is due to their Goblin genes that help to alleviate these conditions.
The Fortitude attribute contributes to raising PHYSICAL resistances. For each Fortitude point beyond 8, all physical resistances are raised by 5% (except PHYSICAL DAMAGE RESISTANCE).
Intelligence contributes to raising MENTAL resistances. For each Intelligence point beyond 8, all mental resistances are raised by 5% (except MAGIK DAMAGE RESISTANCE).
Constitution contributes to raising ELEMENTAL resistances. For each Constitution point beyond 8, all elemental resistances are raised by 3%.
Someone with a 100% resistance to any given effect cannot be harmed by it. This includes if a negative buff is applied that can reduce someone’s resistance. For example, skeletons do not bleed for obvious reasons and have 100% BLEED RESISTANCE. Even if they were hit with an effect that lowered BLEED RESISTANCE, they would still be immune to any BLEED attacks.
Resistances do not affect the “hit or miss” calculation on attacks that use it. But if an attack hits and there is some sort of effect for which the victim has a resistance, the resistance is used in a subsequent roll to see if the effect is resisted. For example, if a Mage casts Ice Knife against a creature that has 25% ICE RESISTANCE, the normal hit or miss roll is made. Assuming a hit is made, there is then a 25% chance that no ice damage will be sustained at all (however, if the Mage has any kind of ice accuracy boost, like the Put them on Ice skill, that will lower the chance). But if the ice is not resisted, the victim will still have the ice damage reduced by whatever their resistance is. In this case, it would be reduced 25%. So resistances help even if they don’t block all damage.
In the case of negative effects, like BLIND or SLOW, the resistance is used to reduce the attacker’s chance to inflict the effect. For example, say a Paladin uses the Fear ability (which has a base 40% chance to inflict PANIC) against a creature that has 25% PANIC RESISTANCE. In the calculations for the roll, essentially the 40% is reduced by 25%, so the chance to inflict is 30% (40 – 25%x40 = 30). If afflicted, the resistance does not affect the duration of the effect.
There are a few more resistances that are not displayed as stats per se, but are a part of the game. When resisting a CHARM effect Intelligence helps. When encountering TRAPS on chests or loot containers, the difficulty of the trap plays a great deal but Intelligence will help resist it as well as being a Ranger or a Rogue and what level you are. Rogues are better at this. DISEASES are nasty effects that many times accompany being poisoned. They can be a significant drag on stats and costly to cure back in town. Fortitude helps to resist diseases, especially for Rangers or Druids. A higher Fortitude also helps against PARALYSIS. Dexterity helps resist against being BOUND.