Parry is a combat defence, like Evade or Block . When an attack is about to strike, there is chance you will parry it with your weapon. Some classes can specialize in Parry, training in it will increase your chances to parry an attack. There are also some NPCs that can parry attacks.
Chance to parry is affected by the amount of specialization points invested into the Parry skill as well as Dexterity
The chance to parry can be calculated with the following equations:
Base = 5% Skill Bonus = 0.5 * (parry spec + realm rank bonus + template bonus)% Dex Bonus = 1 / 40 * ((dex * 2) - 100)% Total = Base + Skill Bonus + Dex Bonus
Adding the results of all three together, you will find your base calculated parry rate before taking into account enemy Weaponskill.