When the party of adventurers gets into a fight, the order of events is as follows

1 Surprise

The DM determines if a surprise roll is required, and if so, both sides roll to see if they are surprised by the sudden encounter. It's possible for some PCs to be surprised when others are not.

2 Declare Actions

Certain actions must be declared before Initiative is rolled (the DM makes a similar determination for the opponents): Charge, Set Defense, and Casting A Spell

3 Resolve Charges

Any Charges are resolved simultaneously. If charging foes meet, their relative speed will determine where they clash and weapon length will determine who strikes first.

4 Roll Initiative

Each group rolls a d6. One roll is made for each group, not for each individual. The side or group with the fewest members gets a +2 to their roll ("Guerilla Bonus"). Ties are resolved simultaneously. #new

Initiative Modifiers

These are common modifiers, but there are other conditions and effects that might change a group or character's initiative.

Guerilla Bonus

The side with the fewest members gets a +2 to their roll.

Spell Level

When casting spells, the caster subtracts -1 from their initiative roll for every spell level past 1.

5 Resolve Combat Actions

First Missile Volley

Resolve any missile fire from stationary shooters from the wining group, and then resolve any missiles from the rest of the groups in descending order.

Actions

First, the side that won initiative moves, attacks, resolves spells, uses items, or anything else they can do. These actions can be coordinated amongst the members of the group and be done in any order they wish. Members of the winning side may declare some kind of trigger ("I shoot any Orc that moves where I have a clear shot") but risk losing the action depending on what happens.

The rest of the groups then resolve their actions, in descending order.

Second Missile Volley

The side that won initiative resolves any second or third missile attacks from stationary shooters, then the rest of the groups does the same in descending order.

Morale

Each monster has a morale rating between 2 and 12, with 2 representing creatures that absolutely don’t fight and 12 representing mindless creatures that always fight to the end.

There are two common times when a morale check is called for during combat: when a side loses its first casualty, and when they lose half their number in combat to death or incapacitation (including sleep, paralysis, etc.).

Procedure

To make a morale check, the DM rolls 2d6 for each monster (or NPC) on the side, and if the result is higher than the creature’s morale rating, the check is failed and the individual surrenders or retreats.