The five damage types, plus how damage is converted and gained.
Damage Types
The damage types are Physical, Fire, Cold, Lightning and Chaos.
Hit Damage
Any damage that isn't damage over time is Hit damage.
Damaging Ailments which result from a Hit will calculate their damage from that Hit, and will not subsequently have Damage modifiers applied directly to them. As a result of this, raising Hit Damage will result in more powerful Damaging Ailments innately.
Physical Damage
Physical damage is one of the five Damage Types. It is the most common and the only one reduced by Armour, rather than by a Resistance.
Most physical damage comes from WeaponAttacks, but some Spells and other skills deal physical damage as well. Physical damage over time can be inflicted with Bleeding.
Fire Damage
Fire damage is one of the five Damage Types. It is reduced by Fire Resistance. Fire Hits inflict Flammability based on how much Fire damage is dealt, which provides a chance to Ignite.
Cold Damage
Cold damage is one of the five Damage Types. It is reduced by Cold Resistance. Cold hits apply Chill and build up Freeze, but cannot build up Heavy Stun.
Lightning Damage
Lightning damage is one of the five Damage Types. It is reduced by Lightning Resistance. Lightning hits have a chance to Shock based on how much Lightning damage is dealt.
Chaos Damage
Chaos damage is one of the five Damage Types. It is reduced by Chaos Resistance.
Chaos damage is the least common damage type, and removes twice as much Energy Shield as the damage value when taken.
Elemental Damage Types
The three Elemental damage types are Fire, Cold, and Lightning.
Damage Conversion
Damage can be converted from one type to another. This causes it to deal the new damage type, scale with modifiers to the new damage type, and no longer scale with modifiers to the old damage type.
For example, Fire damage converted to Lightning now scales with Lightning damage modifiers and causes Shock, but no longer scales with Fire damage modifiers or causes Ignite.
Conversion is a two step process. Conversion inherent to Skills occurs first, then Conversion from all other sources. Damage over time cannot be converted.
Damage Gained as extra X
Damage gained as a specific damage type only scales with modifiers to the new type, not with modifiers to the source damage's type (unless they're the same type).
For example, Lightning damage gained from Physical damage scales with Lightning damage modifiers, but not Physical damage modifiers.
Damage Gain occurs in the same two step process as Damage Conversion. Damage over time cannot benefit from damage Gain.
Culling Strike
Culling Strikes kill Normal enemies if their life is at 35% or below. Magic enemies are instead killed at 20%, Rare at 10% and Unique at 5%. These thresholds are checked before the damage of the Hit is applied.