All hits have a chance to critically strike, or "crit", dealing much more damage than normal. Damage over time effects cannot crit.
All hits have a base critical strike chance of 5%. This can be improved by items, passives, and skill tree nodes.
The difference between added critical strike chance and increased critical strike chance is very important.
+1% critical strike chance will result in a final chance of 6% (assuming no other modifiers), while 1% increased critical strike chance will result in a final chance of 5.05%. Both stats together will result in a final chance of 6.06%.
When a hit crits, the damage dealt is multiplied by a critical strike multiplier, which is multiplicative with other modifiers. The default critical strike multiplier is 200%.
The critical strike avoidance stat grants a chance to cause critical strikes to become normal hits instead. This chance is rolled after the attacker's crit chance.
If an enemy has 30% critical strike chance and you have 50% critical strike avoidance, the enemy will effectively have a critical strike chance of 15%.
All enemy hits that can critically strike have a critical strike multiplier of 200%, but this can be reduced by less bonus damage taken from critical strikes. You cannot have more than 100% less bonus damage taken from critical strikes, which reduces the damage of a critical strike to that of a regular hit.