Armour protects you from getting hurt, somewhat. It's definately not 100% failproof or effective by any means.
There are different types of armours, each with varying degrees of protection and costs.
Some classes may not wear certain armour because of their effectiveness. A list of armour (In ascending order of effectiveness), with the best armour a class may wear:
None Magi Leather Monks, Bards Ringmail Apostates Scalemail Serpents, Jesters, Shamans, Occultists Chainmail Druids, Sentinels, Sylvans, Classless Splintmail Priests Field plate and Full plate Paladins, Infernals, Runewardens
Full plate armour is different, in that the only adventurers who may wear it are those who have forged it for themselves.
NOTE: the classes are listed next to the BEST armour they may wear. They may wear any lesser armour if desired, or none whatsoever.