Peaceful and battle mode are changed. You can switch between them in a house south of the big mountain near the entry of the mines, but you can only do that all 3 days. It's just a touch of the NPCs to switch.
But choose your game mode wisely! In Peaceful mode you don't lose experience in dungeons, you are just switched back to what you have before entering it when you die inside a dungeon. On the other hand you get less experience for killing monsters.
Players in battle mode get more experience, but have the risk to be killed by other players, and lose some experience when they die in the dungeons.
Another new gaming mode is the kingdom mode. When you activate the kingdom bell in your castle you are switched into kingdom mode and see a sign over your head symbolizing your kingdom. In kingdom mode you don't lose experience for dieing, you are just warped back to your castle. We can setup special rules for kingdom mode to make kingdom wars more interesting, like you are kicked out of kingdom mode once you are die, but that is mainly the decision of the kingdoms which organize the role-playing events.