From RetroMMO Wiki

Partying is a mechanic which allows players to group together. A party is created by sending a party invite to another player. The sender becomes a party leader, meanwhile the invitees are party members. Party members may leave the party whenever they wish or decline the invite altogether.

Party leader is in control of the groups movement and the members are aligned behind. All members of the group get restored when the party leader pays the innkeeper at the Inn. This lowers the cost of a full restore by over 33%.

Battles in a Party

The whole party takes part in battles together, but only one needs to survive to win the battle. If a party member's HP reaches 0 in a battle and the battle is won, they will continue the journey with 1 HP. To prevent infinite battles, each round lasts the maximum of 30 seconds. Failing to execute an action during this period is comparable to using the Pass ability. The advantage of a party is that the group's members may use consumable items and certain abilities on each other. Thus the firepower of a party is, without exception, higher than an individual of the same level as the party's highest ranking player. Parties also encounter bigger groups of monsters increasing the danger as well as the gold and experience earned.