Give the players some objectives that they can fail without PC deaths. For example, the party hears rumors that a merchant is willing to pay handsomely for an escort through a dangerous area that is well known for containing threats that should be exceptionally difficult for the players to handle at their current level. If the players attempt to take the challenge, despite obvious clues that they aren't strong enough, give them a very difficult encounter. It shouldn't be impossible, but you should expect them to lose. However, this gives you a logical way to defeat the party without having a TPK. Perhaps the players get ambushed by bandits led by a powerful warlock and some other foul creatures -- a few party members can get knocked unconscious, the merchant attempts to hold onto his treasure and loses his life in the process, and the bad guys get away with what is now revealed to be a powerful magical artifact.
Try to set up battles in terms of objectives, rather than win/loss by one side wiping out the other. Here are some brief ideas which I believe fall under creating lasting harm for a character without offending the player:
Villagers or other innocents are evacuating, PCs have to hold off the enemy for some number of rounds. For every round the PCs fall short, some set number of villagers are killed, and the attitudes of the survivors will be based on this.
Escort a VIP or item, as detailed above.
Players must fight through enemies to interrupt some dark ritual -- failure results in a strengthening of the enemy. Perhaps instead of focusing on their main objectives, players would then be forced to spend time/resources on defending (loss of the battle effectively puts the players on defense)
The players are faced with an almost impossible combat -- if they begin to lose and choose not to retreat, a rival adventuring party saves the day. However, now the townspeople view the rival party as the "true" heroes. PC reputation takes a hit, and whenever PCs get cocky about things, townspeople and rival heroes always seem to be around to point out the players would be paste on some dungeon floor if not for the bravery and courage of these other heroes.
Most of these scenarios end with either the players' enemies growing in strength as the result of an attack where the objective was not to kill the PCs, or the players' standing falling because they failed to be perfect. Again, these should be hard challenges the players have a chance of beating, not impossible situations.
Another idea revolves around player sacrifice, and again the above situations can be adapted to this. Give the players situations where failure means they have to choose how they fail. This can help remove the feeling of invincibility some players get, while at the same time letting the characters have a sense of virtue. Perhaps a situation where the characters, if they can't outright destroy their opponents, have to make some sort of choice -- do they let the bandit leader escape (which means he will take the treasure from this dungeon, and no doubt find the players again), or do they pursue him and fail to save a much-loved NPC from the environmental hazard he/she got caught in during the last encounter? Sure, the characters lost the fight, but they saved their buddy, and can feel good about that. Plus, they'll feel good when you inevitably bring these once-victorious enemy NPCs back so they can exact revenge :)
The GM takes on more work than any individual player in making the world and the game come to life. Obviously a GM without players has nothing, but the lynchpin of the game is still the GM. Having played in many games and GMed many more, I come into any game with the understanding that because the GM has to do so much work just to get the game going, that person should be given the benefit of the doubt where possible.
Your player's reaction to me seems a bit off, in that you were just getting back into GMing and this was the first session in a new campaign. To expect everyone's expectations to align perfectly, and the session to play out without corrections or adjustment is asking quite a lot.
For detailed background, I generally provide overview text and invite the players to ask questions as they come up. It's perfectly acceptable for a player to say, "I figure these thugs should be licking my boots because I'm a member of the guard. Is that right?" This approach requires that the GM be able to fill in details on the fly, but it also puts some of the responsibility on the players. Some players may bristle at this approach because they find it too meta, but the necessity of using it fades away as the campaign develops and the players become more immersed in the world.
Best Answer
What I have done when I running games that don't have this built in is to introduce the concept of tags. In other games, they're called different things, and it's a fairly common technique, though perhaps presented in a different manner.
Each PC when writing his background, tags it with the most important parts of the background from his perspective. These tags are short (less than 5 words) descriptions of what makes that part important. In some cases, I've given each PC a limit of tags; in more open ended (especially diceless) games, I've not really placed a hard limit. But either way, you end up with an open-ended precis of the character background.
Tags are whatever you want to make them. A bit like aspects in Fate Core, i.e. An aspect is a phrase that describes something unique or noteworthy about whatever it’s attached to.
So if the wizard used his abilities on the streets for pay, he might tag that part of his background with
Wizard for Hireand perhapsI learned on the streetsandFriends in low places.Once I have these, I use them in a few ways:
When writing up the adventure, the GM might see the Wizard for Hire, and get the idea that Cortana is the Wizard's rival in the academy and looked down on him for selling his skills and is trying to get him thrown out by framing him. He's just a mercenary after all, so anyone would believe that he killed the councilman for pay.
When running down hints on the charges leveled against him and their origins, the wizard might say "I have friends in low places- Gerard used to run with me and stayed around when I changed circumstances. If anyone knows how I might have been framed, he would."
You can also use them to infer things just by their presence. For example, when playing, the GM might look at the "I learned on the streets," and since that's a major part of the background- the streets know him also, and a gutter snipe that recognized him from when he lived there might approach him because of that with a key piece of information.
By using them in this way, I focus on what's most important to the PCs, and make it relevant to them as protagonists.