Health & Wounds
Every character’s health is tracked through wounds. When he takes damage, a character translates the damage taken into wounds, and keeps track of the severity. You can think of severities as a pyramid: at the base are light wounds (4 of them). After two light wounds have been received, a character suffers one moderate wound (middle of the pyramid). After two moderate wounds have been suffered, he takes a heavy wound (top of the pyramid). At that point, he is incapacitated or even dead.
This means that taking damage can quickly kill a character. Taking damage at once (without armour or other ways to mitigate it) would outright kill or incapacitate him.
Wound Tracking
On your character sheet, you will see a section for wound tracking. If you do not have access to a character sheet, you can keep track of it in this basic way:

Wound Severity Effects
Light wounds do not cause any adverse effects mechanically (besides being that much closer to more severe wounds or death).
Moderate wounds reduce a character’s movement speed by 10 feet each (so with two moderate wounds, movement speed is reduced by 20 feet)
A heavy wound incapacitates a character entirely. He is unconscious. A character with a heavy wound is in desperate need of medical aid and gains the Dying condition.
Healing
Sources for healing are few and far between, while recovering from the physical trauma of a wound takes time.
While in combat, treatment of Light and Moderate wounds may only be attempted once per character per wound. Once out of combat, multiple attempts are allowed. For all failed wound treatments, the wounded character receives +1 Stress.
Light wounds may be healed on the battlefield in 10 minutes with a successful First Aid check (DC8).
Moderate wounds may be patched on the battlefield as well, but they require a much more difficult First Aid (DC12) check and take 1 hour to patch up. The movement impairment effect from a moderate wound remains until the character has spent time resting/healing in down time (in a hospital for a day, or convalescing for a week).
Heavy wounds cannot be treated on the battlefield at all, aside from stopping the character from bleeding out. A character with a heavy wound may not receive battlefield healing for any other wounds they carry. Recovery from a heavy wound takes weeks or months with constant medical attention (preferably in a hospital). A character with a heavy wound (even if it’s been healed) may not receive battlefield healing for light wounds.
Outside of combat, characters passively heal up to 1 Light wound per day. Characters do not heal Moderate or Heavy wounds this way.