Armour Class (AC) is a numerical rating that typically ranges from -10 to 10, indicating the protection that a combatant has against rolls to hit. A "10" AC indicates that the combatant has no protection at all, lacking armour, useful dexterity or toughness of bodily hide — however, this is still sufficient to allow a 50% chance of not being hit by a non-leveled character in combat. As forms of protection are added to the character (including effects from spells, magical bonuses to armour, along with cloaks, rings or bracers of protection), the numerical rating of AC drops. This rating is then subtracted from the number needed to hit AC 0 (THAC0), which easily indicates the adjusted number on a d20 needed to hit.
For example, a combatant is wearing studded leather +1, with a dexterity of 17 and wearing a cloak of protection +1. Ordinary studded leather armour adjusts AC by -3 from 10; a dexterity of 17 likewise adjusts AC by -3. The bonuses from the armour and cloak further adjust AC by an additional -2; altogether, this gives the combatant a final AC of 2. Meanwhile, a 3rd level fighter has a THAC0 of 18. We subtract 2 from this THAC0, giving us the number needed to hit on a d20: 16 (adjusted, not natural).
If the combatant's AC were less than zero, say at -1, then subtracting -1 would be the same as adding 1 to the THAC0; so that the fighter above would need to roll a 19 on a d20 to hit. If the modified THAC0 is 21 or higher, than the attacker would require at least some modifier to hit or else the defender would be invulnerable in a fight.
At first glance, this seems extraordinarily complicated, particularly as one must remember that a +1 bonus to AC is subtracted from the combatant's armour class, NOT added. Numerous players have protested against this apparent inconsistency, and against the apparent complexity of calculating THAC0. However, once the system is fully understood, and the rules remembered, it becomes extremely easy to remember the relatively few modifiers and simple THAC0 table, so that calculating the number needed to hit can be done in within 2-3 seconds.
Some humanoid creatures able to wear armour have extraordinarily tough hides, so that their "natural" armour class — that is, while receiving no adjustments — can be considerably better than 10 (which is standard for humans and demi-humans such as dwarves, elves, gnomes, half-elves, halflings and half-orcs). This is an advantage for goblins, hobgoblins, bugbears, orcs, ogres, giants and so on, as they will commonly have natural armour classes that range from 7 to 2. If these humanoids then wear heavy armour, it is not unusual for them to have much improved AC. An army of orcs (natural AC 6) in chain mail and shield would have an adjusted AC of zero!
Likewise, a warhorse or a war dog has a natural AC of either 7 or 6, so if put into leather or chain barding, the additional benefit of the armour would be subtracted from this number.
When fighting humanoids that are larger than 7 ft. tall, gnomes and dwarves receive a +4 bonus to their AC.
Monsters will normally have an AC well above 10, depending on their natural armour, thickness of hide and natural fighting abilities, as well as natural inherent magic in the creature.
Armour class can also be adjusted by circumstances, such as responding to chemical attacks (such as poison), medical debilitation (such as blindness), unsteadiness of terrain, speed of movement and so on. These additional effects are due to be fully listed here at another time.