Being a party leader requires level 5 and a party holds at most 8 members.
Experience is given in two methods:
Auto share: experience from defeated monsters and completed quests is distributed equally across the party, with the total subject to level-difference variance.
Distribution: experience is given by your own contribution measured from the damage you dealt. With this option selected, the level difference with the leader does not restrict joining.
Item sharing also has two methods:
Item auto share: items are dealt to members in turn (with members A to D, the first item goes to A, the second to B...).
Item distribution: the player who defeats the monster receives the item; here the top damage contributor has priority on the items that appear.
Forming parties and Party Matching are detailed in the In game Community section.