Alignment has always existed in D&D, in some form. In the original brown books, there were only three. Been a while since I've read them, but the options were Good/Neutral/Evil, I believe. Later on you saw the silly current model, with basically five alignments in a line. Lawful Good being the top, Good, Neutral, Evil, and then Chaotic Evil being the bottom. 3E had the nice grid system, with law-chaos being one axis, and good-evil being the other. Most of the players in my group basically said "Neat!" and then picked Chaotic Neutral. With 4e, we are back to the five option variant.
Alignment is something that bothers a great many DMs. It's not the system itself that causes issues, it's how seriously many players (and DMs) take it. They act like that "LG" scrawled on the character sheet means that your character is Jesus reborn. He saves the world every day. He pats children on the head and hands them 500 Platinum just for smiling happily. He gives all his money to charity. He never asks for quest rewards. As soon as anyone mentions any action that might construed as less than holy, he flips out angrily and qutie possibly draws a weapon.
Chaotic Evil is the same way. I'm mentioning the extreme examples of alignment here because they are the ones more commonly overplayed. I'm not even sure how you overplay neutral without just quoting that Futurama episode. Anyway, Chaotic Evil does not make you a psychopath. You are not the Joker. You don't just slaughter everyone you see out of some unending berserker rage. Being chaotic evil does not mean that you have to do your best to be evil and belligerent to everyone you meet. Chaotic Evil races often form tribes, and the tribes have to work together to do things. This is because, primarily, they know that they have to in order to survive, and secondly, they know that the first guy to turn will be slaughtered by the others. Chaotic Evil doesn't mean stupid. Your character should be aware that there is always someone stronger than he, and act accordingly.
We've all played with players like that. Sure, if you are a paladin, maybe you can justify some of it, but not to the extremes that most people play. Lawful Good does not mean you have a constant stick up your arse. You can justify charity and even hatred for evil humanoids, assuming you don't just hate for the sake of hating. Vengeance isn't much better. "Lawful Good" doesn't justify slaughter. The only real place where it might justify constant combat is against inherently evil foes, such as demons/devils.
Slaughtering orcs is not really a good act. Forming a peace agreement is closer, but not always possible. If you know the orcs are low on food and likely to raid the nearby village, you go out to talk to them. They are, perhaps, belligerent and crazy because the DM just wants you to fight. OK then, killing them is fine. I wouldn't call it a good act per se. You are probably getting paid, either in cash or in reputation, so at best it is mercenary work. Chaotic Evil characters can justify slaughtering orcs better than Lawful Good can. Hell, your chaotic Evil barbarian has been itching to taste blood for days of being in town, and when he sees the orc camp in the distance, he doesn't' want to talk to them. He understands that he can't express his inner violence in town, but these are orcs! The peasants will praise him, and he might even be able to take some of their daughters' honor before his true nature is revealed and he's chased out of town.
This is a bit rambling, but I'm just trying to convey my idea of alignment. Any time you can state that your character "Always" does this, or "never" does that, and justify it only from your alignment, you aren't doing it right. Your paladin hates orcs? Ok, why? Being a paladin isn't enough. Even if you keep the behavior of at least drawing steel on sight, you need to justify it. As a child, you saw your parents and village slaughtered by a nearby orc tribe. You were saved from the ashes of the village by the nearby fortress-temple of Hieronious, after crawling through the ashes for three days, delirious with thirst. Ok, there you go. You have a reason to hate orcs, but it's not just 'because I am good'. Hating orcs is a flaw. Hating anything is a flaw in a lawful good character. Taking joy in slaughter is a flaw. It's not good behavior to be that guy.
In short, as the tl;dr version, you are not your alignment. You are a human/whatever. Act like one. You are intelligent enough to know that there are gray areas in goodness, and that your rampaging evil can't conquer the world at level three.
So, paladins of the world, take the stick out. CE barbarians, put the axe down. Embrace sanity.
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