Resting and food

When you may rest

Once every 8 real minutes (4 in-game hours). Logging out and back in does not reset the clock. The game tells you how long is left when you try too early.

You cannot rest at all:

while an enemy is within 30 metres of you
in a dungeon area with an encounter still alive in it
without food, if your race is one that needs to eat

The 8-minute wait does not apply in an arena, in your own house, or in an inn room you have rented.

What a rest gives back

The hit points you recover depend on where you rest:

In the wild with a bedroll: you recover half the hit points you were missing.
In the wild without one: you recover no hit points.
Within 3 metres of a campfire: all your hit points. Campfires stand in some wild areas, and an oil flask makes one.
In a rented inn room: all your hit points.

A room is rented from the innkeeper and is yours for 24 in-game hours (48 real minutes).

Being ambushed

When a rest finishes in an area where PvP is on - in a dungeon, out in the wild - the creatures of that area can ambush you.

The warning is shown to you and your party.
There are no ambushes while the party's average level is below 5, or in an inn.
After an ambush, the whole party is safe from another one for 4 in-game hours (8 minutes).

Food

Most races have to eat to rest. Food is bought, or carved off dead animals. It does not sit in your pack as stacks: it goes into your Food Rations item. Use that item to see how much you have, to throw some away, or to hand some to another player.