Line of sight

Line of sight refers to the path between the player and the target of their action. If this path is clear you "have line of sight" and if it's not clear your "line of sight is blocked". See obstacles for an explanation of which tiles are clear. Tibia's algorithm for line of sight takes some getting used to. The most important detail is it's asymmetry. It's more generous in allowing line of sight past obstacles towards the bottom right of the screen. This stems from the way walls are drawn in tibia.

Click a tile to make it obstructed/unobstructed. Click buttons to simulate an attack.
Use arrows to change direction. Red outline means the tile is blocked from the attack, blue means it is not. This logic of what is in line of sight and what isn't applies to shooting arrows at targets, firing runes, heal friend, and throwing objects. However throwing objects is not as limited. The line of sight checks if the path to the targeted square is clear. If the targeted square is on a lower floor, then it checks if the path downward is obstructed (free of tiles blocking it's descent). If this path is blocked, it checks if the space above your own head is free of tiles, then repeats the same check, but starting from 1 floor above you which allows for throwing bags over walls, as long as there isn't a ceiling overhead and the wall isn't 2 or more floors tall.

Note that while it's called line of sight, looking is possible for any square in your viewport.