Like in fallout if you messed something up you got a bad reputation with a certain faction. Will these elements be included in the game?

Yes, there will be consequences depending on how you do quests. They have given a few examples, like you find this woman on your travels and she's a known witch in the area. She's poisoned and needs an antidote you can either help save her life or let her die. Depending on what outcome you choose the villagers will treat you differently. They would prefer that she was killed, if she is alive they will be upset with you.