Permissions
Permissions are the settings that you grant for specific capabilities.
For example, one capability is "Start new discussions" (in forums).
In each role, you can choose to set the permission for such a capability 
to one of four values:
- INHERIT
- This is the default setting, generally.  It's a neutral setting that
    means "use whatever setting the user already had".   If a role 
    gets assigned to someone (eg in a course) that has this permission for 
    a capability, then the actual permission they'll have will just be 
    the same as they already had at higher-level contexts (eg categories
    or system level).  Ultimately, if permission is never allowed at any 
    level, then the user will have no permission for that capability.
    
- ALLOW
- By choosing this you are granting permission for this capability
    to people who are assigned this role.  This permission applies
    for the context that this role gets assigned plus all "lower"
    contexts.  For example, if this role is a student role assigned
    to a course, then students will be able to "start new discussions"
    in all forums in that course, UNLESS some forum contains an 
    override or a new assignment with a Prevent or Prohibit value
    for this capability.
- PREVENT
- By choosing this you are removing permission for this capability,
    even if the users with this role were allowed that permission in 
    a higher context.
- PROHIBIT
- This is rarely needed, but occasionally you might want to completely
    deny permissions to a role in a way that can NOT be overridden at 
    any lower context.  A good example of when you might need this is 
    when an admin wants to prohibit one person from starting new 
    discussions in any forum on the whole system.   In this case they 
    can create a role with that capability set to "Prohibit" and then 
    assign it to that user in the system context.
  
Conflict resolution of permissions
 Permissions at a "lower" context will generally override 
    anything at a "higher" context (this applies to overrides
    and assigned roles).  The exception is PROHIBIT which can not 
    be overridden at lower levels.
 If two roles are assigned to a person in the same context, one with 
    ALLOW and one with PREVENT, which one wins?  In this case, Moodle will 
    look up the context tree for a "decider".   
    
 For example, a student has two roles in a course, one that allows 
    them to start new discussions, one that prevents them.  In this case, 
    we check the categories and the system contexts, looking for another 
    defined permission to help us decide.  If we don't find one, then 
    permission is PREVENT by default (because the two settings cancelled 
    each other out, and thus you have no permission).
Special exceptions
 Note that the guest user account will generally be prevented from 
    posting content (eg forums, calendar entries, blogs) even if it 
    is given the capability to do so.
See also 
Roles,
Contexts,
Assign Roles and
Overrides.