Altar
Altars are primarily used to pray at to gain Faith
Altars also create the domain of the gods. You know when you're in such a domain when you get the message "You feel the presence of <god>".
Domains can overlap, but only the strongest domain can affect you. When you are in the domain of your God and have at least 10 faith, you'll get certain bonuses, including a fighting bonus. The amount of the bonus is affected by a great number of things, such as faith, alignment, the type of the altar (see below), the distance to the altar, the quality of the altar, and if you're a Champion.
Priests also get a bonus of up to 20% to successfully cast a spell, and it increases the chance of casting a higher strength enchant spell.
Another use of altars is sacrificing.
Types of altars
There are four types of altars. Wooden altars are the worst type, gold altars are the best type. The metal altars can be created inside each others domain, while the stone and wooden altars cannot. However, you can move or finish an altar in another domain.