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Open Tibia (Servers), often abbreviated as OT or OTS are Tibia game servers not hosted by CipSoft GmbH although using the same (stolen) technology. Therefore they are illegal by the rules of Tibia and juridically also by law (because the game server software has been acquired without the approval of CipSoft).
Besides Open Tibia servers being illegal, they also posses a higher security risk, because they are not hosted by an official company but supposedly by anyone. The security of your account name and password can not be guaranteed. Also, if the hoster requires you to download a different client than the normal Tibia client he could infect this modified client with a virus or keylogger.
How it works
To connect with the Open Tibia game server you can often use the official Tibia Client, although you need to change the to which you connect. This is because your client must connect to the OT server, and not to the official game server. There is software available to do this, although this (again) possesses a security threat. Open Tibia servers have often a changed game mechanism with higher loot rates (rare items are dropped more frequently), higher experience rates (you gain you next level faster), higher skill rates (you gain higher skills faster) and so on. Mostly the map is also different than the usual tibia map, mostly smaller. Often the hoster offers premium accounts, certain items or experience packs for sale, for real life money.
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Reasons for stub: maybe still a rewrite, link to official statement of cip about this issue