Ingame helpfile:
Good vs Evil the eternal struggle. Every day, Armagg-odhin destroys the world only for it to be recreated, starting the struggle anew.
But how is the struggle measured? What does Good winning mean? What does Evil winning mean?
Before, not much. Now it does. As the struggle between Good and Evil occurs, the side that gains an advantage, gains an advantage to the power of their damage: Holy or Unholy.
If Evil is killed, the power of Good increases.
If Good is killed, the power of Evil increases.
If Evil is evil resurrected, the power of Evil is increased slightly.
If Good is ressed, the power of Good is increased slightly.
Evil ressing Good or Good ressing Evil cancels itself out.
These are tallied. Holy & Unholy damage are affected, ranging from 80% to 120%. Upon Armagg-odhin destroying and recreating the Retroverse, the War is reset.
When it comes to Good or Evil dying, those dedicated to the service of those ideals have a greater effect. That is, Paladins, Templars, Cultists and Fallen have a stronger effect if they die, than a Good-aligned Mage or Evil-aligned Biomancer.
The rate of this modification is very very small to increase.
Expect larger jumps to occur based on quests, bastions of Good or Evil dying, locations consecrated or desecrated, etc.
Summarizing: unlike elemental balance, good vs evil balance is reseted each boot.