Your skills will increase depending on how you
play the game. For instance if you fight a lot of
monsters your attack, defense, strength and hits
will increase. If you cook food your cooking will
increase, cutting down trees increases your
woodcutting etc...

Your equipment status indicates the power of
the items you are currently wearing/wielding in
your inventory. The armour value is the total of
all the defensive items you are currently
wearing, and modifies your defense in battle.
Weapon aim indicates how easy the weapon
you are holding is to aim and modifies your
attack skills, wheras weapon power shows how
much damage the weapon you are holding can
do and modifies your strength skill.

You should try to wear the items which give the largest values in the equipment
status section. A fully equipped fighter is able to wear a helmet, body-armour,
leg-armour and cape, as well as wielding a weapon and shield.