Defence is a skill that grants players protection in all forms of combat. The higher a target's Defence level, the less likely one is to land successful attacks (Melee or Ranged-based damage greater than zero, or Magic-based offensive spells that don't Splash) against said target. As such, it is a vital skill in high-level PvM and PvP situations. Defence does not decrease the amount of damage that an opponent can deal against you.
Magical defence is different - it is based on 70% of the player's Magic level, while the remaining 30% is the player's Defence level, which is then followed by the player's magical defence bonus from their armour.
A player's Defence level also determines which equipment they are able to wear, as most pieces of armour or other equipment have a Defence level requirement.
Defence is one of the skills that will raise the combat level of a player regardless of other skill levels. For this reason, many combat pures level Defence to a certain level then stop training it to minimise their combat level, giving them an upper hand in Player-versus-Player combat against players around their level. Notable Defence levels are often tied to specific tiers of items or prayers that lead to advantages in combat. To see a complete list of viable optimised Defence level, check the Defence level caps.