[RPG] How to fix the group tension caused by the character stealing and possibly killing without provocation

It really depends on what your goals are.

Death is as significant as its effects are in the game. For games where real permanent death almost never happens to PCs, and has no consequences, death can be quite insignificant. This can also reduce the difficulty and consequences of failure to the point where the players don't really need to fear much of anything, and can expect most or all defeats to be merely temporary setbacks or mere delays on their inevitable path to success and glory. This can undermine the "glory" too, if players notice there's no real question of actual defeat. Many computer games are like that ("Oh I died, better respawn or restore my last saved position, guess I just wasted three minutes..."), and even some tabletop games.)

You asked, "If any major character who dies has the potential to return, won’t death lose significance?" Yes, it loses significance equal to the difference in the consequences between actual death, and whatever death means in the game. However, having "the potential to return" can be very different from easy returning, in a number of ways, depending on the game being played, and what exists in the Game Master's world and the specific scenario. For examples:

• Returning may require special skills which the players don't have easy (or perhaps any) access to.

• Returning may involve a loss of abilities, in terms of experience/levels, attribute scores, or other added disadvantaging side-effects (aging, afflictions, etc).

• Returning may require ingredients which are scarce or challenging to obtain, and/or cost a lot of money, or which could be used for other things if not used for resurrections.

• Returning may involve the challenge of bringing the mostly-intact corpse to a particular location, perhaps within a certain time period.

• Returning may have other risks or limits, such as a maximum number of times per person, or within a period of time, and/or chances of failure and/or side-effects.

• Returning may have religious and/or social stigmas, such as being considered evil necromancy and/or mortal sin. Some people with religious attunement might even be able to tell that someone has been resurrected.

• Returning may also not just be a simple convenient state change. Depending on the game world's spiritual setup, it may be more involved than that, possibly consorting with and striking deals with fae or djinn or spirits or demons, or maybe the PC's own spirit needs to be convinced to return, and so the returned PC becomes focused on whatever that convincing reason was, like a revenant (q.v.).

• Returning may require a long time for the returned PC to be able to be very effective again, during which time they are weak or fragile and need to rest or at least wait to recover their former strengths and abilities.

So I would consider carefully what you and your players think you want death to be like in your games, check out all the options in the rules you mean to play with, and discuss with your players. Then decide what rules to use, what game world situation to set up, and possibly what house rules to use.

For what it sounds like you want, I think you could pick and choose from ideas such as above to get a game where death can be returned from, but only with major costs and effort involved, and as much or as little impact as you want.

Staying system-agnostic, I find that the choice of combat system also has a major effect on the death situation. That is, in games with abstract combat systems, especially games with dangerous abstract combat systems, it may be fairly difficult to avoid death sometimes, and in this case, it may be more tempting to have actual permanent death be unlikely. On the other hand, in games with more detailed tactical combat systems, or games where players have lots of ways they can (and are expected to) be careful to greatly reduce risks of death, and risk management is an important element of play, then it may work well to have deaths and crippling injuries be more or less permanent unless avoided in the first place. Or, player tastes may even enjoy fairly common and unpredictable risks of permanent loss or death, and enjoy that not dying is a significant achievement (that's how many early RPGs played out, any some players still enjoy that experience). (Personally, I mostly run games with little magical healing, but plenty of choices and tactical battles that let the players choose what risks to take. Usually there are very few PC deaths, because they tend to make choices that avoid getting them killed.)

Whats wrong at our table?

The DM and the players are not in agreement about what sort of game they want to play.

In addition, it’s kind of inescapable to conclude that the DM isn’t very good at DMing, at least based on your reporting. Maybe he or she is not very experienced, or doesn’t know the system very well, and so may not realize the difficult problems with the direction they’re taking the game, or how to address them to maintain a fun game. Or that some of their decisions—particularly favoritism and ignoring player feedback—are simply always bad for the game. But whatever the reason for the poor DMing, it still is poor DMing.

Ultimately, though, even poor DMs can run a fun game when everyone is agreed about what sort of game it should be, and the DM gives a good-faith effort to provide it, and the players give a good-faith effort not to derail it. And, in fact, simply listening to players and taking their concerns to heart would itself vastly improve the quality of this DM’s DMing.

how do we fix it?

You talk to the DM. There is no other option here. Getting into an arms race with the DM is a losing proposition every time. If the DM wants you to lose, you will lose.

If talking doesn’t work, the only options left are to just accept it, or to leave the game. I have a suspicion that leaving will end up being your best option, sadly. Since a major problem here is the DM running a game very different from what the players wanted or expected—and they have already ignored feedback about that—it seems unfortunately likely that it will be difficult to convince the DM to change.

Specific issues, and how they compare to expectations in the books:

Over 6 levels, I have received 3 magic items non combat focused. The shops do not keep items

This is problematic because the game assumes that the “Wealth by Level” guidelines in the Dungeon Master’s Guide are being followed. At 6th level, that is approximately 13,000 gp worth of gear that is actually useful and valuable to your character. At a minimum, magic armor, a cloak of resistance +1, and a +2 enhancement bonus to your most important ability score. If a warrior, a magic weapon would also be assumed at this level. If not, that wealth going towards, say, a magic shield or some class-specific item instead.

It is possible—but extremely difficult—to run a game with less wealth. In particular, since magical classes are both 1. the most powerful classes, and 2. the classes least dependent on wealth, you run into a serious situation when you reduce the wealth available to players. You hurt the weakest characters more than you hurt the most powerful characters. Since the most powerful characters were already more powerful relative to the other characters, and only become more so with this change, you exacerbate an already-bad problem with the system. It becomes extremely difficult to challenge all members of the party evenly: anything the mundane characters can handle, the magical classes can solve with a wave of their hand. Anything that actually challenges the magical characters, the mundane characters have no hope of dealing with.

And this isn’t just “harder,” since magic items are so ubiquitous and critical. By 6th level, for example, large amounts of damage reduction that is vulnerable to magic can be found—because by that level, warriors are supposed to have a magic weapon. Warriors without one cannot fight such creatures. Flight starts to become a serious issue, and within a few levels every character in the game is basically mandated to get in the air somehow—and for a lot of characters, that means buying some magic item that allows flight. Likewise with all kinds of important defenses, movement options, and basic “toolkit” answers to common adventuring challenges. Almost all of it requires magic, and if you’re not getting magic from your class, you need to get it from items.

every fight is almost fatal.

Dungeon Master’s Guide recommends an average of four encounters per day, with each encounter requiring the use of approximately, on average, 20% of the party’s daily resources. Deadly fights can and do happen, but they are supposed to be scattered among easier fights, and in particular deadly fights are often expected to be the only (serious) fights of the day, so that daily resources can be focused on them.

We have already had 2 player deaths

Unsurprising, given the above. Not typical for most games, however.

one of my fellow players min-maxed a were creature to help offset the level of creatures we are currently facing.

D&D 3.5e does have an extremely wide variance in PC power levels, so optimization definitely could be a factor here. It could be that the DM is expecting much higher amounts of optimization, and if you had it, none of these issues would be serious issues (well, the wealth still would be, at least for mundane classes). And your party’s optimization does appear to be quite low—you’re new to the game, but even for the rest of the group, a were-anything is not likely to be optimal (level adjustment is near-crippling).

But anyway, it’s pretty clear that if optimization is what your DM is expecting, they haven’t been clear about it, don’t have particularly realistic expectations of new players, and should be doing more to assist if that’s the goal. I could imagine running a game where I, as DM, want to help optimize the players some more so I could throw more interesting challenges at them. I could see offering that assistance, and in extreme circumstances I could even see requiring that a PC be optimized some more to avoid problems with challenging the party. But that isn’t what you’re describing.

Is this normal (as this is my first time playing)?

No, and particularly not for a first campaign. The DM is making numerous changes and deviations from the game’s recommendations to dramatically—and unevenly—increase the difficulty.

We are also running into an issue with favoritism at the table where our thief is making out like the bandit with all the magical items tailored for her.

Considering all of the other poor DMing choices you have already described, I suppose this isn’t any great surprise. The aforementioned Wealth by Level guidelines definitely expect that all characters gain similar amounts of wealth.

Long story short: Your DM isn’t very good.

While a number of the decisions here could be pulled off by a good DM, and justified by a party that was on board with that sort of game, this is very much not the way D&D 3.5e was intended to be played, nor would it be how I would expect a 3.5e campaign to go. I would not feel like I was getting the game I signed up for. The fact that the DM did not describe the ways in which their campaign would deviate from the expectations set forth by the books, and is ignoring the players’ dissatisfaction with the game, and worse is, on top of everything, favoring one player, all lead to “the DM isn’t very good at DMing” as the almost-inevitable conclusion.

It sounds like inexperience, possibly coupled with immaturity. As I’ve said elsewhere, the DM’s control over the game—Rule 0—isn’t their right and privilege—it is a tool with the express purpose of improving the game. This DM is not using that tool for its purpose, or at least not doing so well. If the DM is inexperienced, or even if they’re not but the party is, sticking closer to the guidelines in the books will improve their game. Considering how things are going, if anything this DM should probably be more generous and forgiving than those suggest, rather than being far, far more stingy and challenging.

So I recommend talking to the DM about how the difficulty level is too high, to ask for a more-typical game of 3.5e where the Wealth by Level guidelines are followed (within reason, they give a lot of flexibility), encounter design and spacing guidelines are followed (again, flexibly), and overall the system is run in a way that is more conducive to getting one’s bearings and learning to play a new game.

It is, of course, not helpful to accuse them of being a bad DM, even if they are, so I wouldn’t go there. Nothing good will come of it—that’s just there so you know that this is not typical or expected or lauded behavior.

Even if the DM digs in their heels and refuses to make changes to the game, there is no point in starting that fight—just politely excuse yourself from the game. Hopefully you can find another one—possibly with some of the other players who are dissatisfied with this one. But even if you can’t, no gaming is better than bad gaming—and this definitely seems pretty bad.

(But hey, some good news: if you’re enjoying this game, at least somewhat, despite all the issues, you can look forward to really enjoying a game where you actually get to, well, play.)