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World of Warcraft has created places for players to quest or obtain items, separate from the rest of the world. Items from bosses are Bind on pickup.
Dungeons are places where 5 to 10 players group together. Most dungeons can be found in places where players are questing. Loot is usually on a need/greed system. A dice window pops up, if the player needs it, he rolls need, if not he greeds it.
Raids are places where 10 to 40 players group together. Most are done within individual guilds. Loot is usually on master looter, where one person loots the items from a boss kill. Then by a predetermined system, either through DKP[1] (Dragon Kill Points), loot council or whatever other system is chosen, the items are distributed.