Fate Points are part of a game mechanic which allows the player to directly affect the outcome of a situation. They are mostly earned through solving important or story-related quests, killing reputable characters, and so on.
Fate Point menu, which can be opened by pressing [F]
How to get Fate Points
Convincing the bridge thieves to leave (Shrouded Hills)
Killing the bridge thieves (Shrouded Hills) (Only if you haven't convinced them to leave)
Freeing Gar from H.T. Parnell’s (Tarant).
Killing the Schuylers with Magnus (Tarant). (If you have Magnus with you, you can get a fate point from the encounter. Listen to what the Schuylers have to say, and then agree to make a deal with them. Magnus will, of course, object. Ask him to think about it, but then agree to attack. When you kill the Schuylers you'll gain a fate point. )
Exploring the tunnel under the Bates mansion (Tarant).
Killing Gilbert Bates (Tarant).
Delivering Gilbert Bates’ journal to Cedric Appleby (Tarant).
Convincing Donn Throgg to work with Councilman Babcock (Tarant).
Convincing Donn Throgg to attack Captain Wheeler (Tarant).
Killing Donn Throgg (Tarant). (2 Fate Points)
Refusing master firearms training from William Thorndop after killing the Willenbecker gang (Ashbury)
Convincing Loghaire to end his exile (Wheel Clan).
Killing the Stillwater Giant (Stillwater)
Curing Adkin Chambers of blindness (Stillwater).
Killing everyone in Stillwater.
Discovering the journal on Half-ogre Island (Caladon).
Discovering the journal of St. Mannox and relating its contents to Alexander (Caladon).
Curing Cynthia Wit of lycanthropy (Caladon).
Assassinating King Farad for Heinrich Jenks (Caladon).
Freeing the half-ogres (T'sen-Ang).
Repairing the Altar to Halcyon (Vooriden).
Solving Wrath’s “murder” (Qintarra).
Betraying the Bedokaan lizards to the poachers (Bedokaan Village).
Stealing the idol at Kree without killing anybody (Kree).
Discover the Iron Clan with Both Magnus and Loghaire in Party (Secret Entrance to Iron Clan)
Join Kerghan (The Void)