Armor class is determined by modified by armor bonus, shield bonus, Dexterity modifier, size modifier, Enhancement Bonuses, Deflection Bonus, Natural Armor, and Dodge Bonuses. These bonuses all create a lovely protective sandwich to keep your character safe from harm. The layering in chronological order of reaction are:
- Base (10) +/- Size Modifier
- Dodge Bonus
- Dexterity Bonus
- Magical Deflection
- Shield Bonus + Enhancement Bonus
- Armor Bonus + Enhancement Bonus
- Natural Armor
When an opponent attacks it is my belief that the attack goes from top to bottom in determining whether or not you take damage. The concept that this is base on is the phrase "to hit" is one that doesn't entirely address what actually happens in combat. A fighter with a sword and shield isn't avoiding all contact during a combat, but rather the attacks are glancing off of a shield or armor, but an impact is still being made (it just may not be damaging). This system assumes that in combat damage is anything that would inflict hp loss via internal or external damage (as bludgeons arguably wouldn't pierce through armor but rather cause internal trauma).
Breakdown
Instinct Layer
As a defender, you are attacked. Your Base +/- Size modifier is your instinctive reaction to being attacked so even without armor you could avoid an attack just by moving on instinct. However, even on instinct the bigger you are the easier you are to hit and the smaller you are the harder you are to hit. Assuming your instincts and size fail to resolve the attack, you have the ability to move out of the way of an attack by dodging it. On a standard square-grid your character is battling an attacker in a minimum 5 foot by 5 foot space and, while it isn't a great amount of room, this still allows you to use some nimble actions to avoid contact from an attack. The dodge bonus occurs before the dexterity bonus only because it cannot be modified by what your character is wearing. The Dexterity bonus is quite similar to the dodge bonus, but because your encumbrance affects this, it more supplements your dodge bonus with your natural ability. Arguably the dexterity could be lumped into the base line, but this assumes that Dodging and Dexterity are a separate ability beyond instinct.
Wearable Layer
Once your natural abilities and instinct do not resolve an impact (if your Base AC + Size Modifier + DEX + Dodge < Attack Roll) then you have effectively have been hit, but this does not mean damage has been done. The next layer of defense is the wearable layer which includes any magical items that boost AC, Shields, Armor, etc. Magical items take the first layer of the wearable items as I believe that the magical deflection acts almost as an invisible layer above the armor preventing anything from getting trough. In situations where the magical deflection causes an attack to miss, the description could go that the attack was aiming to hit, but it was warded off before making an impact. If that layer fails, the shield and armor layers are next. In situations where a player doesn't have a shield that level gets skipped, but in theory a defender will attempt to move their shield to block an attack an attack higher than Instinct + Magic + Shield + Enhancement would either hit and continue past the shield. A flaw here would be that if a player would move their shield incorrectly missing to block the attack, in theory their Shield bonus would be ignored since it wasn't blocking anything, but no system is perfect so we must assume anyone proficient with a shield can get contact onto a shield on each attack. If a shield fails, then a characters worn armor is one of the last layers of defense. The armor is more of a passive layer where the attack either hits off of it and does no damage or it fails to resist an attack and results (most of the time) in a player taking damage. This layer tends to be what is considered traditionally within the "hit vs miss" descriptions. Both the shield and the armor both have Enhancement bonuses that are also available to them which would account for the enchantments placed on the items. This layer would fortify the wearable items and essentially account for a higher quality piece of equipment. The enhancement bonus could be another category, but since most players consider an enchanted item to be one item the enhancement gets lumped in.
Natural Layer
In most situations if an attack has gotten past your instinct and wearable layers, you will be taking damage, but for the few that have Natural Armor, you have one last chance. Natural armor is the final layer preventing damage to you and more often than not it will really just see whether the overall make-up of your skin or skin-like outer layer have enough power to resist damage internally (i.e. Bludgeoning) or from an external source (i.e. Piercing/Slashing). In situations where damage is avoided, the description would be on the lines of your armor/shield takes visual/aesthetic damage (not literal -- unless you want to) but fails to deal damage. Otherwise, damage can be describes as a normal "hit" would.
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Altogether, this isn't a perfect system, but when you think about how an attack is actually being inflicted (or how it is missing) you can better provide a variety of description beyond the standard, your attack hits or your attack misses.