When I first saw this game, I thought OMFG, skill based combat. It will be like dark souls, but in first person and with survival! Well, it's not. As it is right now, in a singleplayer or low lag server, no matter how creative you get with blocking or dodging, you will kill faster and take less damage by just walking into a mob while mashing left mouse. If you're on a laggy server, then you will take no damage by just circle strafing around a mob while mashing left mouse. I believe this is partly due to the games currently extremely terrible hit detection, but I think the following changes would drastically improve combat on all fronts.
Blocking and Shield: As they are right now, shields are only useful for pvp, against archers, and against spiders. When you block in pve, THE MOB RECOVERS FROM THE STAGGER of being blocked, faster then you do from the animation of blocking. This means all that happens is that a mob hits you anyway, but you didn't even get to make an attack of your own for the trade. Solution is to have players or mobs who get blocked, stagger for longer. To combat this, harder mobs should all have a guard break type attack they will use occasional. It should have an animation tell, and a longer swing time. For example, the attack the turtles use where they stand up on their hind legs and slam down, that should be a guard break. When players use charged attacks in pvp, that should be a guard break. A guard broken player should be staggered long enough for the aggressor to get in one or two hits.
Armor and Dodging: Dodging right now, is pointless. Absolutely so. It's only there to infuriate you when you accidentally do it while fighting or traveling to suck up large portions of your stamina. You can't use it to effectively dodge attacks in combat, because you have to be standing still and in no other animation to do it, and you can't even really use it to re-position in combat either because the recovery is too long, leading it to be much more practical to just backpedal or strafe. On the flipside, armor is good. REALLY good. And there's absolutely no point in wearing armor of a class lower then you can craft. There are no disadvantages to wearing heavy armor, and no reason to wear light or medium armor once you have heavy armor. My solution to both of these problems is to make it so that as long as the highest class of armor a player is wearing is light or lower, then their dodge will cancel any animation they are in and immediately perform the dodge. If the highest class of armor a player is wearing in any slot is medium, then performing a dodge will only cancel the recovery frames of an animation. If the highest class of armor a player is wearing in any slot is heavy, then dodging works for them as it does now. Just like that, players can pick quick on their foot rogue types, or heavy and tanky frontline types. And combat can be highly skill and reaction based, IE fun and exciting.