To get into combat mode, you must press TAB, your cursor will then turn red.
Yellow cursor=Movement/manipulation
Red cursor=Combat mode
As for blocking, once in combat mode, use your cursor to face your opponent and their attack, you will automatically parry as long as you are not in the middle of a swing.
In Exanima, it is possible to walk by NPC's w/o having to fight them, some are triggered by you being in combat mode, some are triggered by you bumping into them, even if you are not in combat mode and some are triggered by the fact they hated their life and are even more miserable as a zombie ( Just looking at them will trigger them)
Be sure to read through the Quickstart guide (found in the settings menu under the Controls tab), lots of great tips. The game is tough, this isn't going to be your everyday slash and grind. It takes a lot of practice, some have gotten very good, while others (yours truly included) still struggle to advance through the dungeon.
I have found it helpful to grab a shield right off the bat ( lids make great ones) , then in combat, use that to lessen a lot of blows.
Also some attacks only take down secondary health, stamina, (Bright yellow that refills over time) while others take health (red, does not refill over time), getting either yellow or red to 0 will kill you. Some lesser blunt weapons 2x4, etc do secondary health dmg while sledgehammers, metal rods and cutting weapons do primary health dmg. The type of armor and how you wear it will affect those diff dmgs as well.