Combat refers to the state a player enters when actively engaging a hostile mob/player. Typically, during combat the player and the opposing hostile force are damaging each other's health pool, but other aspects such as healing and crowd control also play into combat mechanics.
When engaging in combat, the player character is usually flagged in the game system which can restrict certain game mechanics (i.e. activating sprint or accepting an item quest) from being used.
Combat generally ends when either the monster, or monsters, the player has engaged is dead and all debuffs time out, or when the player/players themselves have died.
In combat, targets can be put into states that make them more vulnerable to certain skills. These targets can be either hostile or friendly.
An example of a state is one player using a skill to put an enemy on fire, and another player using a skill that does extra damage to targets on fire.