When you first start playing the game, you create a character for yourself, and you play the game as that character.
You can only create up to 8 characters, after you reach this limit you cannot create any more on the other servers.
Player characters are just one type of in-game character. Also see Non-Player characters (NPCs).
Some other names used:
- Player Character
Fighting another player character is called Player versus Player (PvP).