As the story progresses, each distinct "scene" is considered an encounter. Where exactly one encounter ends and another begins is ultimately up to the narrator, but in many cases will be obvious. An encounter could be an audience with the king, a back-alley deal, or a tavern brawl. Each encounter represents a distinct, and important, part of the story - typically, "down time" is not considered an encounter (such as uninteresting travel time, hanging around in an inn, perusing a merchant's wares, etc.). If something of interest or danger is about to happen, the narrator should notify the players that they are about to enter an encounter.
The duration of an encounter can be any amount of time. An encounter that doesn't involve danger can progress at the same pace as the rest of the game - players can simply call out their actions in any order they wish, and the narrator can organize the results in a narrative way.
If an encounter involves danger, or for any reason that the narrator otherwise determines, an encounter can be slowed down, during which each character (player and non-player) will take their actions in a turn-based order, with each character acting once per round.
Once the characters are in danger, the narrator will announce it. At which point, all characters will make an initiative test. To do so, simply roll a d10 and add the character's adventure. The narrator will then order the characters from highest to lowest (the narrator can determine how they prefer to break ties, although if the tie is between players, it is best to allow them to choose the ordering). After which, starting with the first character, each character now takes their turn. When all characters have taken their turn, the round ends, and a new one begins with the first character again.
The turn-based structure repeats until the players are no longer in danger, which likely also ends the encounter.
During a character's turn, they can perform up to the following three activities in any order they wish:
During a character's turn, they may opt not to use either their action or fast action (but not both), and instead hold that action for use later in the round (anytime prior to their next turn). To do so, the character must declare what action they are holding (they must specify the action itself, and cannot just hold an arbitrary action), and on what condition they will use it (this must be a specific triggering condition, such as "a foe rounds the corner so that I can see them").
Should the specific trigger occur, the character may opt to immediately (out of turn sequence) use their held action. If they do so, the action is no longer held (it cannot trigger again that round). If they have not spent the action by the start of their next turn, it is wasted (the character essentially waited for something that did not happen, or they chose not to act on it).
Certain effects will specify that a character can take an immediate free action, or may take a free action at some later specified time (even out of turn sequence). See the Fulfill Prophecy action under the Magic attribute as an example. A free action does not count towards the action limits on a given turn; further, a free action that is granted out of turn sequence simply interrupts whatever else may have been happening - after it is finished, the character whose turn it is may continue.
Some actions are labeled as slow. Any such action cannot be taken while in danger; these actions are simply too slow to perform in the course of a turn, and as such are not allowed. Unless a slow action states otherwise, it is assumed to take 10 minutes to complete.
If a character is adjacent to one or more enemy characters while in danger, they cannot simply move away from those characters. To do so, they must use the Disengage (Steel) action. Otherwise, they may move around the enemies (strafing them), so long as they remain adjacent.