Most of the game's mechanics are based on the rules of the table-top RPG Pathfinder, which uses dice for determining outcomes of various actions. By holding down during pause you can set the time to go slowly to better control the course of the battle in a situation where every second counts. Click on an opponent in order to attack them.
To pause or unpause the game, press Space. Combat happens in real time, but you can pause the game at any time to assess the situation and give orders to your companions. The game uses a roll of 20-sided die for combat and many other skill checks.