Final Fantasy 12's battle system brings an entirely new level of tactics to every day monster battles. By doing away with random encounters entirely, this system allows you as the player to decide what to do on the fly, much like Final Fantasy 11.
As you travel through the world, your party members visibly follow you (think Chrono Trigger), all wielding their weapons. The camera itself can be moved back and forth at will, allowing the player to get a better view in all diretions. As there are no random encounters, monsters are also visible on screen. When you approach said monsters, battle instantly begins.
As the battle begins, you'll notice that you have complete control of all of your characters at once. First and foremost, should you decide to issues a command to a specific person, you can press the O (CIRCLE) button and confirm actions with specific characters. On the battle "screen" is the enemies and your characters. Because it is a free-moving environment, the setting may change. And, indeed, more enemies may join the fray in the midst of battle. Some may even attack their own side!
Once a command is issued (such as Attack), that character will continue to do that command until the end of the battle (or until you set another command). When their ATB guage is not filled, they will stand in waiting.
A new system in this battle style, called "Gambit", allows you to choose specific strategies for your team. Depending on the placement of each of your characters, specific strategies may prove more useful than other strategies. For example, placing melee attackers in the front is beneficial, because it keeps the enemies' vision away from long-range attackers in the back.