Damage and injuries
Your health is the maximum amount of damage you can take before sustaining a lasting injury. Health is calculated based on your brawn and will as explained in character creation and can be increased by spending potential.
Whenever you suffer damage from an Attack or risk, subtract that damage from your health. If it'd reach or go below 0, take an injury and then reset your health to its maximum value.
Injuries are lasting physical or mental consequence that bring you closer to defeat. You can suffer a total of three injuries before you are defeated, including the injury that defeats you. If you suffer an injury and you have an unmarked injury box, reset your health, mark the injury box, and if the line next to it is blank, write a brief description of the injury.
Everybody can help offer suggestions for what kind of an injury a character may have taken. Some examples of injuries are a fractured wrist from blocking a crushing mace blow, exhaustion following an inventing all-nighter, or a shoulder bite to the bone from a rat of unusual size.
If you suffer an injury when all of your injury boxes are marked, you are defeated. What defeated means depends on the situation, but in broad strokes it means that you've succumbed to whatever dangers you were facing. Mark the defeated box on your character sheet and
Mark the injury box next to the word "defeated" on your character sheet and write down the injury that took you out next to it. Whatever happened, you're out of the action until the end of the scene and will at least need to take some downtime to recover from the injury that defeated you.
Defeat and what bad stuff is okay
In many TTRPGs, defeat can have mortal consequences. This can make for a tense and exciting story, but it's good to check in to make sure everyone wants to accept those stakes. Before you begin to play, talk with your table to come to a consensus for what defeat should and shouldn't mean at your table. It's ok for defeat to mean different things depending on the player, as long as everyone is comfortable with the types of defeat depicted.
If you take some time to rest and recover, even if it's not a full period of downtime, you restore your health to full. If you receive medical treatment for your injuries while resting like this, you can also unmark one injury box. Your gamemaster may say that you must have access to medical supplies appropriate for treating the injury and/or that whomever is healing you knowledge to treat the injury.
Whenever you spend some downtime resting, you can erase all marked injury boxes and restore your health to full.
Recovering from injuries
Whenever you unmark an injury box, think about what happened to make that injury no longer something you need to worry about. If the treatment was enough to fully heal the injury, erase the description next to the marked injury box. Otherwise, keep it around or rename it to reflect the healing process. Recovering doesn't mean those wounds have completely healed, just that they are healed enough that they are no longer bringing your character closer to a life-threatening injury. If you need to check that injury box again, it means those wounds reopened.