See also: Character Combat
Concealment encompasses all circumstances where nothing physically blocks a blow or shot, but where something interferes with an attacker's accuracy. An Attack that would normally hit, might actually miss because the target has Concealment. A target might gain Concealment from fog, smoke, poor lighting, tall grass, foliage, or other effects that make it difficult to pinpoint the target's location.
To determine whether your target has Concealment from your Ranged Attack, choose a corner of your square. If any line from this corner to any corner of the target's square passes through a square or border that provides Concealment, the target has Concealment. When making a Melee Attack against an adjacent target, your target has Concealment if their space is entirely within an effect that grants Concealment (Such as a cloud of smoke).
If you Attack a target with Concealment, you take a -2 penalty on your Attack Roll. Multiple sources of Concealment (Such as a defender in a fog at night, with no illumination) do not apply additional penalties.
If you attempt to notice a target with Concealment, you take a -5 penalty on your Perception check.
Ignoring Concealment 
Edit
Concealment isn't always effective. For instance, a character with Low-Light Vision ignores Concealment from darkness (But not Total Concealment; see below). Likewise, a character with Darkvision ignores all Concealment from darkness (Even Total Concealment).
Fog, smoke, foliage, and other obstructions work normally against characters with Darkvision or Low-Light Vision.
Total Concealment Edit
If you have line of effect to a target, but not line of sight (For instance, if they are in total darkness or if you are Blinded), they are considered to have Total Concealment from you. You can't Attack an opponent that has Total Concealment, though you can Attack into a square that you think they occupy. If you Attack a target with Total Concealment, you take a -5 penalty on your Attack Roll. You can't make Attacks of Opportunity against an opponent with Total Concealment, even if you know what square or squares the opponent occupies.
If you attempt to notice a target with Total Concealment, you take a -10 penalty on your Perception check.
