In Path of Exile, active skills (i.e., skills that you use on command) are itemized onto "Skill Gems". These gems confer an active skill to the player when they are socketed into equipment and gain experience as the player slays enemies.

A choice of staple skill gems are given out as quest rewards throughout the game to ensure that players have a variety of skills available. You’ll discover rare advanced skill gems out in the wilderness and dungeons. Like all items, these can be traded between players. Some of the more devastating skills are extremely valuable.

Gems can also level up. When a player is awarded experience, all gems in equipped items gain 10% of that value. This gain is in addition to the experience earned by the player. When a gem is removed or traded, it retains its experience. It’s possible to specialize in leveling up valuable gems and trading them to other players. We haven’t announced the number of levels that gems will have, but it takes a substantial amount of experience to reach the highest levels of gem potency.

This is Path of Exile's passive skill tree. It is a vast web of 1350 skills that provide passive bonuses to your character. Each time you level up or complete certain quests, you can allocate a skill and explore deeper into the tree. All character classes share the same tree, but start at different locations that are aligned with their primary specialties. You're able to either focus on improving your core abilities or travel across the tree to allocate exotic skills that your class normally wouldn't have access to.

Alongside the regular passive skills are Notable and Keystone passives. Notables have slightly larger icons, specific names and larger effects. They help guide players to build their characters on a macro level, allowing them to see at a glance what a cluster of passives skills does by examining its Notable passive. Keystone passives, however, fundamentally change the way a character is played by altering the game rules. They usually have one positive effect and one negative effect. For example, Necromantic Aegis takes away the properties of your shield, granting them to your minions instead of to you.

If you want to adjust your passive build during gameplay, there are Passive Skill Refund points available from quests or relatively rare items in the game that can be found or traded for. Fixing mistakes with a character build or improving small-medium sized aspects is relatively easy, but our intention is that players who want to try substantially divergent character builds are encouraged to play a new character through the game, organically leveling it up rather than just respeccing into it.

Characters can only see and interact with other characters in the same league. In this way, each one is its own isolated economy. The default league is extremely large and hence acts as a general economy for all characters that were not created in a specialist league. All characters in a league have access to the same shared stash pages.
Competition

Each league has its own set of ladder rankings. We’ll be frequently creating short term leagues that last varying durations (a day, a weekend, a week, etc) with item rewards for the highest placed characters on the ladder at the end of the league. There are leagues that end once a specific goal has been met (a race to level 90, for example).

League competitions are another way for players to get rewarded for their play skill and to be competitive with other players as an alternative to PvP.
Completion

There are a few permanent long term leagues including the default “standard” and “hardcore” leagues. All other leagues have a duration value and a parent league. When the duration is over, all characters in that league become part of the parent league.

Whenever any league ends, its characters are all converted back to its parent league. This way, no one loses the character they were leveling (it just ends up in a less restricted economy/ladder than the one it was initially being played in).
Game Modes

Leagues are able to apply a different set of game rules to their players. For example, increased monster difficulty, world PvP, permadeath or various "Ironman" rules.

We have many plans for interesting game modifiers that leagues can apply, but one rule is clear – they must only make the game harder. Because characters transfer back to the parent league when a league ends, it is important that the character’s journey to its current status was equivalent or more difficult than gameplay in the parent league.
Paid Leagues

In addition, we plan to allow guilds or groups of players to pay for the creation of their own league with a choice of game rule modifiers. Only players invited by the people who paid for the league can create characters in these private leagues. This option helps cater towards any groups of players who want to play online together but don’t want their playgroup to have access to items traded from external players.
Example Leagues

The following are examples of leagues that we are working on designing. Feedback and ideas are greatly appreciated - we're very keen to hear what you think on the forums.
Hardcore

Typically, “hardcore mode” in action RPGs involves permadeath. A character killed in this mode cannot be accessed any more. In Path of Exile, slain hardcore characters revert to the parent non-hardcore league. This system encourages non-hardcore players to try the hardcore game mode, while still permanently removing hardcore characters from the economy when they die.
Ironman

In Ironman, players are unable to trade with vendors or refill their flasks in town. Mana regeneration is disabled by default. Players are encouraged to band together and manage their resources in order to survive.
Cut-throat

The cut-throat leagues appeal to the niche of players who demand the most hardcore gaming experience possible. In this mode, all world areas are public, with full PvP enabled by default. Slain characters drop all their items upon death. This game mode can also be combined with Hardcore to create an even more unforgiving world.
Attrition