Being built upon a new intellectual property, Bioware had free reign on how the game universe would shape up and the rules that govern it, managing in the end to create an empire which although fictional, could have very well existed a long, long time ago.​

As expected from a Bioware game, Jade Empire too has a Good / Evil moral system, but not in the classical sense of the terms, since we’re actually dealing with two philosophies: the Way of the Open Palm and the Way of the Closed Fist. On one hand, Followers of the Way of the Open Palm believe that strength lies in maintaining one's station and in thinking of the greater whole before considering the parts. As such, it concerns itself with the prosperity of the people, almost to the exclusion of the safety of the individual. On the other hand, The Way of the Closed Fist teaches that strength is power, that power is desirable, and that all things bow to those who know what they want. The Closed Fist is not concerned with consequences or with balance; personal station means nothing to one who would murder friends and family to reach his heart's desire.

The beauty of this system resides in the fact that no matter the choices you make during the game, you can find the motivations in the path that you follow. And as you will find out for yourself during the game, it’s not the actions of a person that are good or evil, but the intentions that lead to them. The Way your character walks will also determine if you will be able to obtain certain side-quests and gems or use certain martial arts styles. Unfortunately, towards the end of the game you’ll reach a point where you will have to choose again between the two Ways. And if you choose the opposite philosophy of what you were following, your alignment will shift radically to reflect this choice, thus negating every choice you made up until that point. Think of it as a giant RESET button, which greatly diminishes the value of your actions up until that point.​