When and where enemies find you on the road.
Atlas → Settings → Random encounters: Off, Low, Normal or High.
In the wilderness, these enemies can find you:
In towns (inside a settlement, or close to buildings), only enemies you've placed there can appear: enemies whose Areas include that settlement, a district in it, or its region. A town nobody has placed enemies in is safe.
Enemies can be set to appear at any time, only by day, or only at night (evening and night).
Enemies close to your level are much more likely to turn up than ones far above or below you. If an enemy has variants, one of them sometimes appears in its place. See Creating enemies.
An enemy's level is a minimum. When you out-level it, it grows stronger with you, up to twice its original strength, so even early enemies stay a little dangerous.
Fights in town use the settlement's picture as the backdrop. Out in the wild, it's the landscape of the biome you're in.
Bounty markers from the Bounty Board are separate from random encounters. They're always there until you defeat them, even with encounters turned off. See Quests.