Alignment can affect your choice in class, can affect which items you can and cannot wear,
as well as how neutral npcs react to your presence.
How you can lose alignment is simple, you must 1 shot neutral (grey tagged) npcs or players with a disc,
1 shot hitting with a weapon will not effect your alignment.
To fix any loss of alignment, you will require 1 atone scroll for each step of alignment,
atone scrolls can only take you back to G/n.
If you are for example, N/e, you will require 2 atone scroll charges to be g/n.
There are two quests you can use to get back to G/g alignment. Betty in frore and Timmy in Cob.

Atone scrolls are found on the corpse of Minotaurs, in either of the two lairs in nork or the minotaurs in Kingmino dungeons.

Type #List stats to view your alignment.
Alignment Desc Benefit
G/g Good with Good tendancies Able to become a paladin if main class is fighter.
G/n Good with Neutral tendancies None
N/n Neutral with Neutral tendancies Townies begin to attempt to steal from you
N/e Neutral with Evil tendacies Townies continue to steal from you
E/e Evil with Evil tendancies Townies will attack you as often as possible, gold dragons in frore included!