You get karma by making choices in Explore. These choices will either gain or lose karma. For example, the cub will give you options to kill it, ignore it, or frolic with it. Killing would take away karma. Playing with it will give you positive karma and you get a chance to claim the cub's aunt.
The amount of karma you have determines whether you have an evil or good lion. For instance: -12 would be bad karma, while 12 would be good karma. You unlock new titles when you get a certain amount of karma. If you have -30 or 30 karma, you unlock the first title -29 (and above) and 29 (and below) are neutral and you can pick a title from the snake's wife in questing. There is often a third option that are neutral.
The snake's wife (under Quests) is where you go to find out how much Karma you have. You pay her 50 SB to find out what your karma level is.
Karma specific items are planned to be released in the future.