In the Charmed universe, morality is not a matter of perception, but an objective absolute. "Good" and "Evil", rather than being a label for a particular pattern of behavior, is set affiliation, as if they are the political parties of the supernatural world. Each has a hierarchy, agents, and an agenda. As with political groups, characters are fully aware of their affiliation and have the ability to switch between the two with relative ease.
- Leo: "Death is a part of life."
- Alpha: "Natural death, yes. But not the death caused by the pointless, endless battles between Good and Evil."
- Leo: "They're not pointless. They're necessary. And when good wins..."
- Alpha: "Wins? Duality is self perpetuating. It feeds only on itself. That's why the battle has been raging since the dawn of time. There is no winner."
- — Leo and the Avatars discussing about the nature of Good and Evil.
Oddly, good and evil behavior seem to be a consequence of a character's affiliation, rather than the reverse. That is, a character does not belong to Evil because he is selfish and cruel; his selfishness and cruelty are the result of being affiliated with Evil. An otherwise-good character who is forcibly converted to Evil will begin to manifest selfishness and cruelty. An otherwise-evil character who is forcibly converted to Good will find his selfishness and cruelty vanish of their own accord.
However, because the world is not just black and white, a good being can commit an act of great evil without being turned to the side of evil. Such an example was when Leo and future Chris ruthlessly killed valkyries to help the Charmed Ones. While the reasoning behind this is not clear, it could be because they felt guilt for their actions, and their actions were motivated by a desire to serve the greater good. Evil creatures, however, generally enjoy killing, and generally only have petty reasons for doing so.
The forces of Good, lead by the Council of Elders, consist of good witches, Whitelighters, Angels, and benevolent supernatural beings such as Leprechauns and Nymphs. Good beings provide healing, foster positive emotions, and attempt to protect innocents and vanquish evil.
The forces of Evil, under the leadership of the Source of All Evil and the Triad, consist of Demons, Warlocks, evil Witches, Darklighters and assorted maligned supernatural beings such as Banshees, Vampires and Harpies. Evil beings are chiefly concerned with acquiring power, performing acts of cruelty, destroying powerful Good beings, attempting to harm innocents, and increasing its influence in the mortal world.
An intended part of the Grand Design is that there must be a balance between Good and Evil, or the world will literally stop spinning. Any switch between the two sides must happen naturally, over time, and upon the creature's free will. Any other type of conversion is dangerous. As shown in It's a Bad, Bad, Bad, Bad World, a world with too much good is just as dangerous as a world with too much evil.
In It's a Bad, Bad, Bad, Bad World, Part 2, the "perfect world" that Gideon created in his plot to destroy Wyatt proved the dangers of a world that was entirely dedicated to punishing the guilty. In this world, every small break of the rules was a capital offense, with the penalty often nothing short of the removal of limbs, and, more often than not, death.
Some supernatural beings are Neutral, like the Angel of Death. They are not aligned with either Good or Evil, and do not participate in the eternal struggle between them. Instead, they perform other functions in maintaining the Grand Design, or are free to pursue their own agendas. It should be noted that Neutrality is not an affiliation, it only indicates a lack of affiliation with Good or Evil. Two Neutral beings, such as an Avatar and an Angel of Destiny, will not necessarily be friendly to one another.
Other Neutral beings include the Avatars, who do not align themselves with good or evil, but act independently in their attempt to create Utopia. They seek to change the Grand Design rather than maintain it as is.
It is said that there will be a final battle between good and evil, for which all the Valkyries train for, to fight for the side of Good. It is never quite mentioned in Charmed as to when this will happen.