Open Tibia (Servers), often abbreviated as OT or OTS are Tibia game servers not hosted by CipSoft GmbH and are using open source technology created from scratch. They are illegal by the rules of Tibia and connecting to them using Cipsoft's Tibia client is illegal by law, however the Open Tibia servers can be legally used.
Open Tibia servers posses a 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 owner 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 IP Address to which you connect, some Open Tibia servers are having custom client to connect with. 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. Open Tibia servers have often a changed game mechanism with a different loot rates (items are dropped more or less frequently), different experience rates (you gain your next level faster or slower), different skill rates (you gain higher skills faster or slower), custom NPC's, monsters, quests and so on. Some OTS's are even completly changing the gameplay. Mostly the map is also different than the usual tibia map, mostly smaller (but some maps are bigger than Cipsoft's one). Often the OTS owner offers premium accounts, items and other advantages 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