Alignment is a philosophical or inclined sense of believes. By default, Lawful characters believe order and justice, while Chaotic characters believe in anarchy, with Neutral characters being more self-concerned, and on the fence. This is not necessarily limited to these facts, as players can adjust the system to fit their needs or ideals.
In the early years of Dungeons & Dragons and with Chainmail, alignment was a way to establish the forces of good or order versus the forces of evil or discord. In that time, alignment was open-ended to account for concepts used in fiction like Conan the Barbarian and Elric of Melniboné (see below).
There are a number of ways to deal with this system:
White, Brown, and Black Hats
This is the good ol' fashion Good vs Evil. Lawful characters are the heroes, Neutral characters are the anti-heroes, and Chaoic characters are the villains.
Civilization vs. Barbarism
|"Barbarism is the natural state of mankind. Civilization is unnatural. It is a whim of circumstance. And barbarism must always triumph."
- Robert E. Howard, Beyond the Black River
With this, Law (or Civilized) is about the belief in law and civilization, while Chaos (Savage) is about lawless and savagery, and Neutral (Pioneer) believe in a more independent and less centralized form of civilization. Morality has little or no bearing with this system.
An alternative to this, is the concept of Civilized, Barbaric, and Mercenary Honor. This system binds a character to a code of honor, but it also grants favorable reactions if their reputation precedes them.
Civilized Honor is about chivalry and loyalty to one's lord. Duels must be honored. They do not recognize any notion of Barbaric Honor.
Barbaric Honor is about standing by ones' allies when they need help, and loyalty to a stronger leader. This honor is more individualistic then the others.
Mercenary Honor is about honoring contracts and employers even after employment ended, and to respect other professionals - even when pitted against each other. Professionalism means everything to them.
Cosmic Law and Chaos
This is a battle on a cosmic level, where the Forces of Law tries to maintain order and constancy from the decay and corruption from the Forces of Chaos, and both are held in check by Cosmic Balance (neutral). This is best played in a setting with a focus on cosmic forces.
Chaos expresses the principle of possibility unfettered by rules. In general, magic and sorcery draw on the powers of Chaos because they break the laws of nature. The effects of Chaos can be beautiful, but left unchecked, they become too disruptive for life.
Law provides order, structure, and justice to the world. Without it, nothing material could exist. Law appears friendly to life, but a realm controlled by Law alone becomes just as stagnant as one overrun by Chaos. Ordinarily, however, Law is benevolent and beautiful in its perfect regularity.
Cosmic Balance maintains the balance of power between Law and Chaos by keeping both sides from overstepping the rules of war. The Balance is the power most beneficial to life, which needs a mixture of Law and Chaos to exist.
An extension to this is the system used in (unofficial OD&D) Supplement V: Carcosa. Alignment on the planet of Carcosa is defined solely by one's stance towards the Great Old Ones (like Cthulhu, Hastur, Yog-Sothoth, et al.). Nothing else is considered, as it does not define ones' morality, ideology, or allegiance. If the Great Old Ones were to be released from their imprisonment, Chaotic characters would aid these dark lords, while Lawful characters would fight them akin to the Battle of Ragnarök, and Neutral characters would just avoid the conflict all together.
|Dick >||Asshole >||Pussy >||Dick|
A rather colorful take on alignment comes form Trey Parker and Matt Stone's satirical marionette film Team America: World Police that brands people as Dicks, Pussies and Assholes. This is best for political parody/satire, or comedic settings. This comes form a statement from the movie:
|"See, there are three kinds of people: dicks, pussies and assholes. Pussies think everyone can get along and dicks just want to fuck all the time without thinking it through. But then you got your assholes, Chuck. And all the assholes want is to shit all over everything. So pussies may get mad at dicks once in a while because, pussies get fucked by dicks. But dicks also fuck assholes, Chuck! And if they didn't fuck the assholes, you know what you'd get? You'd get your dick and your pussy all covered in shit!"
- Dunk in Bar
A Dick is basically a jock. (In fact, "jock" is an ol' time-y word for "dick.") They are usually cocky and gung-ho by nature. Due to their brash nature, they are rash in their actions, frank in conversation and easily goaded into foolish decisions. They pride themselves on being tough, but suffer sensitive egos when reputation is at stake. Despite this, they can be counted on for getting things done in a heroic way.
They see Pussies as weaklings, and would torment them out of habit or a desire to toughen them up. Despite this, Pussies can gilt Dicks into compliance. They see Assholes bottom-feeders with no self-respect, and would keep them inline if they step out of line.
A Pussy is a caring, soft-spoken person who usually act in a thoughtful and respectful way. This has the added side-affect of making them hesitant or being overly-apologetic at times. They handle rudeness with passive-aggression. Despite this, they can be highly diplomatic and insightful.
They see Dicks as jerks with no respect for others, and would treat them with passive-aggressive stings. Despite this, they often become enthralled by Dicks due to their debonair nature. They have even less respect for Assholes, and would usually loose their composure round them.
An Asshole is a manipulative, self-serving bastard with no interest in other people's ideas, and would dump on anything or anyone that disagrees with him. They are always scheming and trying to turn people on each other. They cannot be counted on, unless they also benefit form it. Despite this, they can be counted on for thinking ahead (if only to save their own asses) and to get their hands dirty.
They see Dicks as fools and loose-cannons. They want nothing better to keep them inline, if they had the balls to do so, and would use higher powers (political authority or the system) to do so. They see Pussies as weaklings to fallow what they think is right. They would usually bully Pussies into action.
|Lawful Good||Good||Unaligned||Evil||Chaotic Evil|
This is a leaner set of alignment. The best example of this is from 4th Edition D&D. This method is often criticized for being a simplified cop-out, that makes Chaotic Evil as being "more eviler than evil", but this is included as reference.
|Lawful Good||Neutral Good||Chaotic Good|
|Lawful Neutral||True Neutral||Chaotic Neutral|
|Lawful Evil||Neutral Evil||Chaotic Evil|
The first part (law/chaos) is about a character's stance on social or cosmic order, while the second part (good/evil) is about moral standing. Save for True Neutral, all other neutrals are subdued.
Neutral: Old-School vs New-School
True Neutral in 1st and 2nd edition AD&D, as a balancing-act between all other forces. To maintain this alignment, one might switch-side for the sake of keeping one-side from getting too powerful. In 3rd edition D&D, this system became more natural and easier to follow. True Neutral in this edition is like a common person with no real strong standings with anything. They would likely go out of their way to help a friend, but not so much for a helpless stranger. All other neutrals are subdued with how they deal with social order or morals, so you can easily list Neutral Good as just Good. 2nd edition AD&D takes neutral alignments to an extreme, by maintaining the comic balancing-act with these alignments. That is, a Neutral Good character would follow the law, unless the law tramples on the welfare of the people, and then rebellion is required for the sake of the common good.
This is a more specialized form of Alignment introduced in d20 Modern, and used in 6th edition Gamma World. With this, a player may choose what a character finds important in life. This could be a person (leader or figurehead), an organization (a gang, tribe, or even a whole nation), a belief system (religion, philosophy, ideology, and the like), and so on. A character may have up to 3 Allegiances, with the most important listed first, and the least important listed last. The benefit of having an Allegiance is getting favorable reactions with like-minded people (+2 to Cha-based checks, some groups and religions may even offer some perks). Players are free to change allegiance if its not working for their character, and my pick a new one between games. The benefit of this system, is that it helps round-out (in a mechanical way) a character's beliefs and motivations.