Rules explanations and clarifications:
Because C.Orgs are capable of independent thought, they aren't complete robots. If the players suggest something that a character can't accomplish, they'll take the next-most-common action suggested instead. If none of the suggested actions are possible, they'll reload preferentially and then take an action dictated by their personality type.
Move - Each character has a hidden movement statistic that determines how far they can move. If players suggest a character move further than they're able to for one action, they'll stop in cover if at all possible instead of moving as far as they possibly can and standing out in the open. Characters can move over and through some obstacles.
Shoot - Players have a hidden Aim statistic used specifically for shooting and all weapons give a bonus/penalty to hit at point blank, short, and long range. If players suggest for a character to shoot at something that they have a 1% or less chance of hitting, they'll typically consider that impossible unless the players are fully aware of the very small chance of success and want them to go for it anyway.
Aim - Aiming increases the chance to hit for the next attack taken, as long as the next action is either an aim action or an attack. Aim actions stack in this manner. The aim bonus will be lost if: 1) An attack is taken. The attack will gain the aim bonus gained so far. 2) an action other than Aiming is taken (this includes moving, using skills or abilities, etc.) The aim bonus will be lost unless that action was an attack. 3) All visible enemies when the character began aiming move to radically different positions (typically, outside of the same piece of cover if they were behind cover.) This means it's possible to still Aim and use the sniper rifle, even though the sniper rifle takes two actions to fire, as long as the last action on the previous turn was an Aim action.
Reload - All weapons have a magazine size, and tickmarks on the character panel indicate shots fired. Characters bring 4 reloads on missions.
Use Item - Some items provide passive benefits and don't need to be "used" to function. Once a player uses a consumable item, they can scavenge another item from an enemy/the environment, or be given one by another character with an "Interact" action.
Close Attack - Close Attack automatically holsters the character's weapon and draws their CQC weapon as part of the action. Once the character has made a Close Attack action, they must spend an action to draw their main weapon again. Basic CQC weapons deal substantially less damage against enemies that are described as being "armored."
Interact - This action can be used to manipulate the environment. It can be used to move/turn over furniture to make barricades, search corpses, desks, trash cans, etc. for supplies, hold down or threaten an enemy that's surrendered, or trade weapons or equipment with a teammate. When trading equipment, only one of the two charaacters needs to use the interact action, not both. Characters have to drop their current weapon or item to pick another one up. They can only replenish their 4 magazines without having to drop their item, although they can hold 4 more in the item slot.
Hunker Down/Stand Up- Hunkering down lowers movement substantially, but gives all enemies a penalty to hit that target whether they're in cover or not. This penalty stacks on top of the penalty from being in cover, so hunkering down in cover makes a character much harder to hit. This penalty doesn't apply to attacks that don't use the accuracy stat, which include Close Attacks and some magical/psychic abilities. It does reduce the damage from explosions like cover does. If a character is knocked over from an effect, they typically will not receive the Hunker Down bonus, but can take the Hunker Down action instead of standing up if they want to.
Lookout - If an enemy moves into the weapon's point blank, close or long range, the character will attack with a penalty during the Enemy phase of combat. If the character is Looking Out only at a specific location, they won't have a penalty to attack. Enemies already in range when the character looks out won't be automatically attacked on the Enemy phase unless they move, so they can stay still and return fire without provoking the Lookout attack.
All cover is assigned an Aim penalty if a character is behind it. Some cover also reduces damage from explosions or area effects in front of it, possibly completely negating it. Cover doesn't otherwise mitigate damage.
Armor reduces incoming damage by a fixed amount. It never completely eliminates damage, even if the mitigation is higher than the normal damage of the weapon. The only exception to this rule is if a suit of armor is specifically proof against a certain kind of attack. For instance, some armor may make a character proof against fire damage or psychic attacks. Even then, if an attack deals enough damage, it may be able to exceed the protective capacity of the armor and deal greatly reduced damage to the character.
Health is the amount of damage a character can take before becoming a casualty. If a character takes more than half of their health in damage, they will be Wounded and need to spend a Base action recovering before they will return to full health. Taking a Wounded character on a mission instead of letting them recover incurs a large penalty to calm, which makes the character a lot more likely to panic and typically reduces their relationship with you. Even if brought above half health with a Trauma Kit during a mission, a character will still be considered Wounded after the mission.
If a character takes more damage than they have health, they become a Casualty. They are incapacitated, fall down and cannot take actions. They have a chance of being permanently injured or dying, based on the amount of damage they took over their current health when they were injured. If left sitting in a pool of their own blood, they will reroll these chances every round. If they receive an injury, they won't keep receiving further injuries on subsequent turns, but will continue to roll to die. If a medkit is used, they will stabilize and no longer make these rolls, but be unable to act. On most missions, they'll be automatically collected at the end of the mission. Subsequent damage taken while in this state is extremely likely to kill or cause multiple injuries to a character.
A Casualty will have to spend a base action recovering to become Wounded, and another base action recovering to fully heal. You cannot take Casualties on missions.
Characters with Animal Toughness, Alien Anatomy, or Large Frame can be revived with a Trauma Kit use and continue to act. They will have 1 health, and so will be extremely prone to injury or death if they're hit again. They will ignore any injury rolls made before while in this state, but will still receive injuries after the mission if they failed an injury roll before they were stabilized. They cannot be brought above half health no matter how many times a Trauma kit is used on them, and have a penalty to calm and aim. They will still count as having the Casualty status after the mission.
Some events force characters to make a Calm check. If they fail the check, they will become Shaken, and if they fail by a substantial amount, they'll Panic instead.
Panic causes a character to take a substantial penalty to hit with any attack, and they won't listen to suggestions. Typically they will run into cover, hunker down, and fire at close enemies. They will re-roll their Calm check at the beginning of the next player turn. An adjacent character can Interact with a Panicked character to let them re-roll their Calm check with a bonus immediately.
Different events give a bonus or penalty to the Calm check.
Typically the following actions force a Calm check:
A teammate (including that character) becomes Wounded
A teammate becomes a Casualty
A teammate dies
A civilian dies gruesomely
A Large enemy appears
Some magical or psychic attacks are used by an enemy
A Terrifying scene is revealed when the character enters a new location
Shaken characters have an Aim penalty and their Calm is reduced. Shaken character must make a Calm check if they take any damage at all, not just if they're Wounded. If a character gains the Shaken effect again for any reason, (including failing a Calm check) they Panic instead.
Shaken doesn't go away on its own: A character must Interact with them to give them a chance to roll a Calm check and pass. If a character recovers from Panic, they're automatically Shaken if they recovered on their own, and may be if they recovered because of an ally Interacting with them.
Characters become excited when they use certain actions based on their personality. While Excited, they have a bonus to Aim and Damage, and automatically pass any Calm checks. If they were Shaken, they automatically recover. Panicked characters can't become Excited even if they perform their favorite action.