Damage Types and Potency — The Elder Scrolls Online: Morrowind eGuide

It’s worth remembering the type of damage each general set of items and equipment employs, as well as understanding the optimal methods of increasing the damage you inflict.

Stamina-Based Damage

Any ability using Stamina scales with Weapon Damage and your Maximum Stamina, and also increases at higher ranks (I to IV). To enhance the level and quality of your weapons (except staves), use item sets, jewelry enchantments, potions, certain buffs (Brutality, Endurance, Savagery, Force, Empower, or Fracture), and better-quality weapons. To enhance your Maximum Stamina, use Attribute Points, certain armor enchantments, the Robust jewelry trait, items sets, and food.

Magicka-Based Damage

Any ability using Magicka scales with Spell Damage and your Maximum Magicka, and also increases at higher ranks (I to IV). To enhance the level and quality of your spells and staff weapons, use item sets, jewelry enchantments, potions, certain buffs (Sorcery, Intellect, Prophecy, Ward, or Breach), and better-quality weapons. To enhance your Maximum Magicka, use Attribute Points, certain armor enchantments, the Arcane jewelry trait, item sets, and food.

Critical Strikes

There’s an initial 10% chance that each strike you land may inflict half as much damage again, thanks to a Critical Strike. This occurs whether you’re using weapon-based (Stamina) or spell-based (Magicka) attacks. Employ item sets, potions, and certain buffs (Savagery or Prophecy, depending on whether you use Stamina or Magicka) to enhance your Critical Chances and Damage.

Increasing Damage a Lot, Then a Little

As you progress, you receive a diminishing set of returns for the expenditures to your damage rating. Begin by improving your Maximum Stamina or Magicka and your Weapon or Spell Damage, then work on your Critical Strike improvements while concurrently collecting enchantments, items, and buffs. Don’t forget to up your armor enchantments so you’re more proficient at surviving the enemy, too.

You should also learn the different character archetypes (builds) and employ the recommendations to create a more well-rounded character, as sometimes focusing purely on increasing damage ratings at the expense of every other aspect of your build isn’t the wisest plan. Why have amazing Weapon Damage if your armor rating is so low that you’re cut down in seconds?