Damage can be dealt by a number of effects, including attacks, card abilities, and obstacles.
When you suffer damage, it affects shields first. Each shield token cancels one Hit Damage or Crit Damage. If you have no shields, you instead receive damage cards: a Hit Damage deals a facedown damage card, while a Crit Damage deals a faceup damage card, and you must follow the damage card's text.
Being dealt a damage card by an effect is not the same as suffering damage. If an effect gives you a facedown or faceup damage card, shields do not block this effect.
Repairing a damage card flips it facedown. Exposing a damage card flips it faceup. This is not the same as suffering damage, but its effect could deal additional damage.
Faceup damage cards have special effects that can hamper or a ship or threaten it with more damage, such as Blinded Pilot or Fuel Leak. For a list of all damage cards and their effects, see Damage Cards.