Armor is very important in Gates of Andaron. From the weak cloth armor to the nigh-indestrictible plate armor, there are many choices for your class. You start out with the weaker type of the armor, but when you reach level 13 you take part in a quest that enables you to put on more powerful armor.
Cloth and light armor are very weak against melee attacks, allowing any creature that has a melee attack, (which is most of them,) to induce higher damage on you than a mage. Leather and hard leather are a kind of an intermediate, protecting weakly against both melee and magic. Chain and plate mail are the strongest against melee, but very weak against magic.