Oz journeys into the dungeons of Mislid to kill the demons and gather treasure before returning to town with his loot. Loot can then be used to pay for the rental fee at the inn you are staying or to buy weapons & equipment for your party. Battles take part in dungeons, but the game's central hub is set in a town. While at the inn or in the town, You can rest or have conversations with other characters at the inn, inn, Certain characters you have a chat with can trigger event cutscenes too, so it may be worth talking to almost everyone that you can.
Kotaku - Demon Gaze is very much a dungeon crawler RPG in the vein of games like Wizardry. The basic flow of the game is that you take a party of characters into a 3D dungeon, a la the old Windows 95 3D Maze Screensaver, where you explore, battle monsters in basic turn-based combat, collect treasures, level your characters, return to a base of operations to recuperate and sell off excess items to buy better items, and head back into the dungeon to explore further. It's all very straightforward. My own experience with these types of dungeon RPGs is somewhat limited. I played but never cleared the original Wizardry on my father's Mac back in the 80's (P.S. Trevor sucks), and I played the Game Boy game Wizardry Gaiden 2 -Curse of the Ancient Emperor- so much so that I ended up with a party of characters with over 3,000 hit points apiece. Those are my only real points of comparative reference, so I don't know how Demon Gaze stands up to or compares with more recent dungeon RPGs. Sounds like It could be similar to Eterian Odyssey IV, which personally didn't go down to well with me. Lets hope that's not the case and theres more to it than meets the eye.