Simply put your Statistics are your might, will and grace. Each of these makes your character stronger in a different aspect.
Might improves your characters overall physical strength. Not only does this increase your attack power but it also allows you to wield heavier weapons.
Will improves your characters ability to successfully cast and block spells.
Grace improves your characters ability to dodge attacks.
There is a cap set at 130 for each of these statistics. However, you can visit the Forever Tree and spend your experience to increase your stats beyond 130.