Outlawed means the player attacked another player who wasn't outlawed (innocent).
When you are outlawed, you should watch out for Outlaw Hunter's. They kill fast.
Many players kill outlawed people often, so watch out.
To get out of the outlaw state, you just need to wait in-game.
When you are outlawed, you lose an item in your inventory every time you die (random item).
People can't attack outlawed in Non-PvP zones.
If your not outlawed and kill an outlawed person, you don't get outlawed yourself.
If you die and drop an item, you need to retrieve it within 15 minutes.