Area of effect, AoE, or simply AE, spells and skills affect a given area of the game world, and not any one specific target; any elligible target inside of the area will be affected by the effect being applied. Typically, that means all enemies in an area, but it could also be all allies or even all PCs. AE effects can be of all types, affecting friendly or non-friendly targets.
Area effects break down into a number of distinct sub-types as follows.
Basic Area Effect Edit
Basic area effect spells require a target to cast, sometimes known as the anchor, and their effect then radiates outwards from the anchor until it reaches either the maximum area (radius) effected by the spell, or affects targets equal to the highest number allowed by the spell.
Most damage-dealing area effect spells have no upper limit on the allowed number of targets affected, but other types of spells often do. In the event of more targets inside the area than allowed, targets are generally selected from the center of the effect going outwards until the number is reached.
Ground-Targeted Area Effect Edit
Most commonly abbreviated to GTAE, ground targeted area effect spells differ from basic AE in that the anchor is a point in space (typically, on the ground), rather than a character or NPC. Otherwise, GTAE tends to function exactly as described above.
Point-Blank Area of Effect Edit
Generally called PBAoE, or just PBAE. This means an effect where the caster is the anchor for the spell. The effect radiates outward from the caster up to a given range, affecting all targets, or the first given number of targets the expanding 'ring' impacts.
Cone Area Effect Edit
Sometimes known as CAE, but more commonly just called "cones", this form of area effect affects targets in a cone-shaped area in front of the caster. As usual, when there is an upper limit on the number of affected targets, they are generally selected from those eligible nearest the caster first.