Short answers, pulled from the story.
An action role-playing game combines real-time combat that tests a player's physical coordination or reaction time with role-playing mechanics such as character creation, skill trees, stat-driven progression, and party management. Standard RPGs typically use turn-based or menu-based combat; action RPGs replace that with direct real-time input from the player.
Dragon Slayer, created by Yoshio Kiya for Falcom and released for the PC-8801 computer in September 1984, has been called "the very first action-RPG ever made" by GameSetWatch. The Tower of Druaga, released in Japanese arcades in June 1984, is also cited as a major early influence that directly inspired Dragon Slayer's creation.
T&E Soft's Hydlide, released in December 1984 and created by Tokihiro Naito, was the first action RPG to feature an overworld. It sold 2 million copies across all platforms. Critic John Szczepaniak argued that "it cannot be overstated how influential Hydlide was on the ARPGs which followed it," including the Ys series, which borrowed Hydlide's health-regeneration mechanic.
Diablo, released in 1996-97 by Blizzard North, stripped friction from combat and loot through a click-to-move dungeon-crawl format and launched Battle.net for always-available online co-op. Its impact was broad enough that some players use "action RPG" to mean exclusively Diablo-style games, and it spawned franchises including Divinity, Torchlight, and Dungeon Siege.
Soulslike games are a subgenre of action RPGs known for high difficulty, environmental storytelling, and a currency system where progress can be lost on death. The subgenre originated with FromSoftware's Demon's Souls in 2009 and expanded significantly after Dark Souls in 2011. Elden Ring, also by FromSoftware, surpassed 25 million sales within its first few years after release in 2022.
The Kingdom Hearts series had shipped more than 36 million copies worldwide as of March 2022. The first game in the series was released in Japan on the 28th of March 2002 for PlayStation 2 as a crossover of Disney properties set in an original fictional universe.