--Edit to clarify, as each enemy/PC enters turn-order at a different time. It's difficult to find a perfect way to explain. Please correct the following if it's off; this is from personal experience.

Taking an action triggers turn-based mode for each enemy. The enemy takes their place in the turn-order by taking said action. The action is usually charging and taking a swing. Ranged enemies will lock in after taking a shot or firing a spell. Until then, they are unlocked and will wander until they take a first action.

Your characters also enter into turns after taking an action. So before locking in, you can select your slowest character and use their slowest/strongest attacks for the first action.

Damage-over-time spells (such as Burning Haze or Zap) break the rules. They act in real time. So while everyone may be locked and waiting for their turn, the damage will still be ticking by. The same goes for the delay on many spell effects, such as Healing. The Heal spell will take a few real-time seconds to activate, but the player can simply wait for it to activate before using another PC's turn.

The recovery time of the actions taken determines when each PC will be able to act next. Breaking a crate will recover much more quickly than casting a Level 6 spell such as Dust to Dust, for example.

You can move at will and walk away. If you don't move, enemies can't act until their turn. Moving a certain distance will pass a turn, allowing enemies and allies to take their turns. So you will be attacked while moving closer or further away, due to passing turns. You can also use this to use up turns until someone can cast a healing spell, for example (useful since the "Pass Turn" hotkey only selects the next PC rather than actually using up turns). Or you can use the movement to dodge an enemy spell projectile.

At a certain distance away from enemies, turn-order is thrown away, and combat is in real-time. In this finicky distance, combat is pretty much free-for-all. It's a good time for magic-users to throw many spells in quick succession. If the enemy enters the turn-based distance, your character will act, enter turn-based, and then instantly skip to the next character in turn-order, which will cause the next character to take a (perhaps unwanted) action if rapidly clicking.