Unarmed is a style of combat in which a player is fighting with no weapons equipped. As a result, the player has no attack bonuses, besides those that may come from other items that may be equipped, such as an amulet.
Players engaged in unarmed combat normally do so because they do not have the funds for a significant weapon, or are simply trying out fighting barehanded.
Players not engaged in combat are often unarmed to minimise their excess weight, thus enabling them to run for longer periods of time.
Other uses of "Unarmed"
Unarmed may also be used to describe a player who has no weapons wielded or in their inventory. This context is most often used when a player may not be carrying a weapon as a requisite to travelling to a certain location. For example, "a player travelling to Entrana must be unarmed." The same applies to entering Glarial's Tomb. In addition, two players may consent to fight unarmed in the Duel Arena.