Dodge is a defensive mechanic that grants you a chance to completely avoid taking hits.
Your Dodge Chance is calculated from Dodge Rating and is lower in higher level areas. Dodge chance cannot go above 85%.
Where "a" is the zone’s area level and "x" is Dodge Rating.
A good rule of thumb is that having dodge rating equal to 10 times the area level will give you about 50% Dodge Chance.
A zone's area level can be viewed on the overlay map (tab by default).
Dodge cannot protect you from Damage over Time effects, but dodging does not count as being hit.