With Physics:
Using physics, the objects will move and interact according to the settings you give them, the world they exist in, i.e. gravity,friction, mass amd so forth, only moving based on applying forces to them directly or indirectly, for example a ball rolling down a slope.

Without Physics:
Using move functions like c_move and c_rotate you can instruct an entity to move around the game world. Variables such as GLIDE or IGNORE_PASSABLE can change the way these entities interact with other objects.

In most cases you would probably not use Physics unless your game really requires it, such as a snooker or pool game. For example a while ago I created a roller ball style game that used invisible physics balls for each player, creating a more fluid and realistic form of movement, but this is something of an edge case.

If I was you I would take a look at the manual and some of the tutorials to get a good grip on movement in the engine.

Hope that helps