A party is a group of either monsters or characters, even though players will never be able to possess or control a monster party. Also, every party has a purpose, either it is meant for adventuring or for ladders.
Adventuring parties are meant to roam the world and fight monsters while ladder parties exist for the sole purpose of competing in that particular ladder. A character can be part of several parties, so it can adventure and participate in several ladders at the same time. A character can join only one adventuring party since it cannot be in two places in the world at the same time! All parties are independent from each other, so performing some operation on one will not impact the others ( changing the automatas of a character for instance ).
Parties are separated in two regions: the front and back row. Characters, when creating the party, are assigned a position within one of those two regions. The front row defends the back row and so it is typically composed of fighters that can take the brunt of the attacks. See the combat section for more information on the protection of the back row. The back row is usually filled with support characters like rogues and spellcasters.
Also parties have Leaders.