The island is almost entirely populated by Dark-Elves (they call themselves Dunmer), and is ruled by a Tribunal of three recently ascended deities. At the center of the island lies a blighted area inhabited by the rebellious Dagoth Ur (and minions), who hopes to infect the entire island with an incurable Corprus disease and conquer the world with his own mechanical god, built by the ancient Dwemer dwarves (who have since disappeared from the island entirely) and powered by the same artifact that gave the Tribunal their powers.
MorroWind is unique in the sense that the island is a huge, continuous expanse of land ready for exploration. There are more than 1000 unique NPC's on the island, and at least a few hundred caves, tombs, smuggler's dens, shipwrecks, and ancient ruins to explore. You can literally walk (or jump or fly) in any direction you want, and cities and castles are just another part of the landscape . (Although building interiors are separate maps, probably to prevent poly-counts from getting too out of hand.) MorroWind is probably the most open-ended RPG in existence, and has enough in it to interest just about any character the player chooses to play as. The "main" quest is actually surprisingly short; one could go through the entire "main" quest and still see less than 1% of the people and places in the game. The side-quests represent the bulk of the game. Some side-quests consist of many interlocking missions, some are a single task, and some are just random places to explore.
The game system itself is equally open-ended. Distinct classes are vitually nonexistent; a player can adjust the starting character package (which is fully customizable), but can then go on to learn any skill desired. (Or all of them.) Everything is based on some sort of 0-100 scale skill, plus one of six 0-100 stats. Skills improve with use (stabbing things increases long-blade skill, etc.) or hired training, and a character gains a level for every 10 skill increases. (The starting options include categories for "specializations", which affect how rapidly these skills improve with use.) At every level, up to 3 stats can be increased from 1-5 points, depending on the skill increases that resulted in the level gain. (Lots of dexterity-type skill boosts might give a 5x dexterity boost, although you could choose a 1x strength boost instead.)
The first expansion, MorroWind: Tribunal lets you travel to the city of Mournhold (on the mainland) and the dungeons thereunder - a much smaller area than MorroWind itself. Gameplay remains mostly unchanged, though the new journal-sorting feature is invaluable.
In the second expansion Bloodmoon, you get to travel through the exciting frozen island of Solstheim, inhabited by Nords and the Imperial Trading Company. There are lots of new monsters and they're mostly strong! Of course the big feature in Bloodmoon is turning into a werewolf. The final quest is very exciting and dramatic, and in it you can receive a cursed ring that turns you into a werewolf. Or you can be bitten by a werewolf and contract (almost) permanent lycanthropy.
There are a few notable bugs in the game that can make it much easier. The permanent summoned/bound items bug and the infinite strength from Corprus bug come to mind.
AlexUtter has accumulated an impressive set of [loot] from playing this game *way* too much. (Actually that's a fairly old screenshot...I found the items given for completing the main quest to be significantly weaker than my existing equipment.)
Best and most aesthetically beautiful RPG ever (although buggy as hell and probably coded by monkeys with lobotomies.) -MichaelMaindi
Simultaneously one of the most fascinating and tedious games I've seen in a long time. -AlexBobbs
If you're not a completion whore, you can beat the game in 10 minutes. If you insist on doing all sidequests, you might be able to beat it by the time you die. --SkyeBerghel