Defence is a statistic that represents how hard it is to land a solid Hit on you.
A Hit roll must equal to your Defence or exceed it in order to be successful.
If the Hit roll exceeds your Defence by 10, it is a Crit.
While unarmoured it is: 8 + DEX + Level Bonus
Armour and some abilities can give a different equation to follow.
You may not mix these equations, but may choose which applies at any time.
Shields and some abilities may give a flat bonus to your Defence which is applied on top of the value given by your chosen equation.