With magic or melee attacks you deal damage to your opponent, see also Melee Combat. Damage is calculated after the following scheme:
Damage= Weapon/Spell damage + Strength/Power * Attack Delay + Attack Skill * Attack Delay - Target's Armor * Attack Delay
All the modifications are divided by values that I'm not going to reveal at this time, but as stated originally, Strength/Power is 50% more valued than Skill, and Armor is slightly more valued than Strength/Power. The above result is then put through a Gaussian randomizer to give greater variety.
When damage is being calculated for a damage over time effect or a damage shield, the Strength/Power and attack skill are inherited from the values used to give the target that effect. For instance, the Engulf effect will have damage based on the Power and flame skill of the caster, because that was the attribute and skill used in the Engulf attack itself. [¹]