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(As the Ink Stains Games stuff seems to be unaware of our GOG forums, I'll copy another entry from steam... originally posted there on May 2nd)

Hello everyone!
In today’s devlog we’ll tell you about the crime and punishment system, which will be added with the “City of Gold” update, planned for the end of this summer.
Initially, we didn’t plan to add this feature so soon, however the random encounters system that we’re currently working on requires killable NPCs and, subsequently, a punishment for killing them. Other crimes are just a logical continuation of this option. Let’s start with reviewing the general mechanics.

Crime Mechanics


Any unlawful action that you perform in front of a NPC is considered a crime. This includes:

Disturbing the peace. Opening containers that don’t belong to you, setting traps in public locations, throwing items at NPCs, using certain abilities (such as spells) in public, trespassing, and so on.
Breaking a lock. Attempting to pick or force open locked chests and doors.
Theft. Taking items that don’t belong to you.
Livestock slaughter. Killing animals that are considered more valuable (such as cows and horses) will result in a more severe punishment than killing cats and dogs.
Assaulting an NPC. Delivering a first strike counts as an assault.
Killing or knocking NPCs out. In case you decide to follow through with your assault.
If you commit anything from this list (other than an assault or a murder) and don’t get caught in the process, this won’t count as a crime.

Punishment

Every crime has a number of consequences:

Reputation loss. The amount lost depends on the severity of a crime. For instance, a murder can negate the Reputation gain from completing a few dozen contracts and will make the locals hate you.
It’s worth mentioning that the Reputation loss also affects your standing with the entire Faction, even if to a lesser extent. Therefore, if you frequently get caught stealing in Osbrook, the rumors will reach Mannshire and Brynn, damaging your Reputation there as well.

Becoming wanted. For the duration of being wanted, guards will try to fine or arrest you, and the local population will refuse to have any dealings with you, be it trading, giving contracts and tasks, or even talking. It’s also impossible to sleep and save your game in the settlements where you are a wanted person.
You’ll also become wanted in other settlements of the Faction, not just the one where you commit a crime, so it might be a good idea to wait it out in a neutral location or, in the future, with another Faction.

Receiving a fine and serving jail time. You can atone for your crimes by doing one of the following: pay a fine or go to jail. The amount you have to pay or the time you must serve depends on the severity of your crimes.
However, you can always refuse to cooperate, temporarily making the guards hostile. If you start losing a fight with them, you’ll be given another chance to surrender.

Jail

If you decide to save your money and go to jail instead of paying a fine, your sentence will depend on the amount and severity of your crimes - up to forty days. You’ll also experience it personally: all your items will be temporarily confiscated, and your character will be locked up in a cell. You’ll have access to a cot, which you can use to skip a day, and to a guard, which will bring you a daily plate of gruel and a chunk of bread to keep you from starving to death.

Spending time in jail will gradually increase your reputation up to Neutrality, reflecting your redemption. At the same time, the lack of practice will cause you to lose experience. However, you won’t lose much and you can’t regress in levels - you can only lose the experience accumulated towards your next level up.

Thievery

Most containers in the settlements will now belong to Factions, and any item that you take from them will be considered stolen.
It won’t be possible to sell “borrowed” goods to traders in the same location - you’ll have to either move to another settlement, find a fence, or just wait for things to calm down. The duration of search for stolen items depends on their value - for instance, a stolen bucket will quickly be forgotten, while a piece of jewelry will have people looking for it for a long time. The same logic also applies to the severity of fines.

Murdering NPCs

All NPCs outside of settlements will be killable - any patrol or a merchant that you encounter on the road can be murdered and looted for an immediate gain.
NPCs within the settlements will remain unkillable, since doing otherwise might potentially prevent the players from being able to progress. It would also require a huge amount of context-dependent dialogues, visual changes to the settlements, and so on. To sum it up, it wouldn’t be wise to spend so much resources on a feature that would be ignored by most players.

Although, it will still be possible to attack these NPCs - upon being brought down to 0% HP, they’ll become comatose, regaining their senses once their Health regenerates to a certain threshold. Doing so will count as a murder within the planned crime system. If you have the inclination, this will allow you to knock out village merchants and rob them of their crowns and a few items, but you won’t get to loot the entirety of their stock..

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That’s all for now. Until the next devlog!