Cover is a situation when an object physically impedes an attack, usually by blocking a portion of the target’s body. Standing behind a wagon or a low wall, or hiding behind a door are all examples of cover. Cover in Pathfinder: Kingmaker is somewhat rare, although you will find objects and the terrain obstructing your (usually ranged) attacks from time to time. Cover typically provides the protected character with a +4 bonus to Armor Class and a +2 bonus to Reflex Saves.
More common than cover is Concealment, a situation where a target’s exact location is obscured (usually by illusion magics or similar effects) but not physically blocked. Like Cover, a Concealed creature gains a defensive bonus, this time in the form of a chance for all attacks to miss them instead of a bonus to Armor Class or Saving Throws. This miss chance comes in two amounts, representing how concealed the creature is - 20% (Blur) and 50% (Displacement, Invisibility). To calculate whether an attack misses or not due to concealment, an Attack Roll is made as normal, and if that attack hits, a d100 is rolled. If the roll on the d100 Concealment check is lower than the creature’s concealment, the attack misses.
Obviously having a 20% or 50% chance to negate any physical attacks that come at a character is a huge defensive boost, and fortunately these Concealment effects can be replicated with Arcane spells. You’d be wise to take advantage of such potent defensive buffs during your adventures.