While the short answer to the above two questions is a) killing people, and b) different outcomes, it's much more involved.
Let me explain.
The Chaos System in Dishonored changes the way the game plays depending on your actions (lethal or nonlethal). You may have noticed that end of each mission the game presents you with a stat sheet, showing you how many people you have killed, along with a Chaos score that will read high/low.
The reason your Chaos rank is high is simple: you killed a bunch of people. However, it's all relative to how many NPC's there are on the map. Here's the breakdown:
- Less than 20% of the NPC total will yield a Low Chaos score.
- Above 20% of the NPC total will yield you a High Chaos score.
- If you have somehow managed to kill above 50% by the end of the game than you will have a Very High Chaos score and both the final mission and ending will be different.
Along with that, a High Chaos score will change the way conversations are had, security systems are set up, guard alert, Weeper count, and of course more rats.
There are also two types of Chaos triggers: systemic and scripted. Systemic Chaos events can happen any time while you are playing. They are part of the world of Dishonored. They are:
- Kill a civilian
- Kill 3 City Watch guards
- Kill 3 Weepers
- Kill 3 Thugs
- Kill 3 Assassins
- Kill 3 Tallboys
- 4 Alarms triggered
- 4 corpses found
If you notice that you have a High Chaos rating and don't want that, then you need to pay attention to the Scripted Chaos events as they will lower your score. Examples of this are saving civilians or choosing the nonlethal way to eliminate your target.
That's how the Chaos system works. I'm currently on the Very High list as Shadow Kill is way too much fun.