Defense is a stat that reduces damage taken from attacks. Defense does not reduce damage taken from falls or status effects. The Defense points number is the percent of damage that is substracted from any attack. So having 0 defense points means receiven full damage attack, while being able to achieve 100 defense would nullify any incoming attacks.
With very high Defense, it is possible to completely deflect attacks that do not surpass the damage reduction threshold. These attacks are considered Blocked, and no damage is dealt to the player.
The Armor Icon represents the value by which a specific piece of armor will increase the player's defense, thereby increasing damage reduction.