(last updated: 12/28/17)
Chi is called many different things in different languages and cultures, referred variously to as chakra, ki, energy, and a host of other terms. In rough terms, it is the energy of nature and the world itself. All living things, and by extension every fighter with the exception of a very select few, have some degree of chi--even if they may not necessarily know how to channel it externally.
Chi is the force that the majority of fighters use to perform their various awe-inspiring feats of skill and strength. Various styles of using chi can be broadly seperated into two schools; the styles that use chi externally, such as throwing ice blasts and sheathing your punches in fire for example; and the styles that use chi internally, such as being able to break brick with your bare hands, leap twenty feet into the air, or block a knife's edge with your bare hands.
Chi used externally is the most common application, and even many new fighters in the combat circuit have learned to shape and mold their chi into dazzling shapes and dispositions. Most fighters have what is called an 'elemental affinity' for a natural element or force; various colors of fire is the most common, but many other elements, such as ice, earth, water and wind, are possible. Some talented fighters are able to channel more than one affinity of energy this way, and can control their chi to much greater extent.
Elemental chi tends to react just as its element would. Air can cut, fire can burn things down, and water can soak. The limitation is that chi is only as dangerous as its wielder against any given target--while a very strong fire chi user could burn down a house relatively easily in one stroke, his flames generally wouldn't be able to cripple a fighter of equal strength in anywhere near the same period of time.
Most of the more exceptional expressions of chi come from directly manipulating and channelling the chi "aura" that is around all living things. While an overall expertise with the natural aura of individuals and objects would actually be more classified under aura, many expressions of chi attacks deal directly with the aura of others; attacking another person's energy system and chakra pathways is an example of chi expertise. This can be true even if the strike to do so would otherwise be physical in nature!
Generally, the difference between a chi feat and an aura feat is that attacks that manipulate an outside aura are chi, whereas feats that manipulate your own are aura. Chi represents the outward expression and manipulation of the world's energy, and strong users can modify the flows of energy in an incredible fashion. Beyond the reach of most, a powerful chi user can spawn or influence natural disasters and phenomena through chi; many natural weather patterns harness or respond to chi in some way. Something like a natural lightning bolt or meteor strike from space utilizes elemental chi on levels far beyond what humans are able to match, and a powerful chi user can still influence these events either directly or indirectly. They can even levitate massive boulders or affect the natural flow of energy in the world through powerful rituals.
Extraordinary physical abilities are not required to control chi, only a strong mind and spirit; so a strong chi practitioner might not appear any tougher than an ordinary person. This has led several very competent chi users to be branded as sorcerers or magicians, as some of their conjurations may appear indistinguishable from magic.