When you die, your soul is judged by Lysara. If she deems you worthy of return, you will get the chance to choose a church to return to. To rejoin the living, pick a church from a list (newbies will always go to Offestry). Once there, you can get a new body in one of two ways:
pray
lets you rejoin the living with a D flag, allowing you time toreturn
lets you rejoin the living without a D flag.You will be barely alive and still need healing. If you are alone, it may be best to return to a city where you have funds, to buy kits and repair your items. This represents that you have been through an ordeal and need time to recover.
Returning to life at churches comes at a price:
Item deterioration
Though passing the veil will never destroy an item, all your enchanted gear will be severely damaged. You can try to repair the items yourself, if your skill is high enough (skills and discern), use the mending spell (if available), or visit a vendor and pay for repairs. Weapon vendors repair weapons, armor vendors repair armors, and so forth. Some vendors have workshops to repair everything. It is not recommended to explore in damaged gear: damaged weapons deal less damage, and damaged armor offer less protection.
Dying in parties
Surviving party members often have means to resurrect you on the spot. Such restoration has no price, but you might want to prepare yourself for immediate combat. It is highly recommended that parties decide in advance if they plan to resurrect fallen members, and where they will re-group if members die and can't be raised at the time.
Dying in player kill
When you die to player kill (PK) - killed by another player character - you will find yourself in a special death room. Read rules, post pk rules and nopk, and proceed accordingly.