Permadeath is a rule under which a character who dies is gone permanently, with no revival and no reload that restores them. In its strictest form it ends the entire run and deletes the save.
Permadeath changes every decision by making loss irreversible. Without it, a failed fight costs time. With it, the same fight can cost a character built over twenty hours, and players plan around that risk: they retreat earlier, spend resources they would otherwise hoard, and feel genuine relief when a wounded favourite survives a mission.
Games apply it at different scales. Traditional roguelikes end the whole run on death, so the save is the stakes. Tactical games apply it per character. Fire Emblem in its classic mode retires units who fall in battle, while its casual mode brings them back afterward, and XCOM with Ironman enabled saves continuously so a dead soldier cannot be recovered by reloading. The optional Ironman framing matters: permadeath imposed as a chosen mode respects players who want consequence without forcing it on everyone.
Designers use permadeath sparingly because its cost is real. A story heavy game that kills a character with hours of written dialogue loses that writing for that player. The mode works best where systems, not scripts, carry the experience, and where starting again is itself part of the game.
In play"Play carefully in the final mission, because permadeath is on and a loss here is final."