Vitality is a stat that represents how fatigued your character is. Having an high vitality grants additional stats and performing any actions will slowly drain your vitality. When your vitality hits zero, you don't incur in any penalty, but you will not benefit from any stat bonuses. Vitality is restored by Bards. When they play music at an inn, you can right click on them and select "Listen to Music". Your vitality will start to increase until it reaches 100%. If you are not gaining, it means that the bard is not close enough to the inn's Hearth.
Alternatively, Bards can restore vitality outside the inn, by setting up a Campfire. The easiest way to setup a Campfire is to look around for some Kindling on the ground, which can be used to quickly set it up. Be warned that if any player gets near the fire while in combat, it will disturb the Campfire and put it out.
The bonus granted by vitality depends on your vitality level:
100% - 51%: +10% stats
50%-26%: +5% stats
25% - 1%: +2% stats
0%: No bonus stats