When your hitpoints drop below zero, you die.

Dying can be nasty because you drop everything you have, and you will drop one
level (cannot drop below 1 however).

Also, you will lose some xp. How much exactly depends on how much you have
minus how much you need for the level you have after death.

This means that advancing when you can reduces the penalty for death because
you will not have as much 'spare xp'.

When you died, you will have to goto a reanimator before you can continue
playing.

You can find a reanimator in the administrative building on Zone 4