Awe is the state of being too amazed to do anything. Those with Awe as a trait inflict it upon those who get a good view of them; not eternally, but probably long enough to prevent them from striking.
Awe kicks in after repel attempts fail (or partially succeed), and after Petrification from the merest glimpse of a Petrifier's face, but it otherwise works before every other defensive trait. For reference, it kicks in just before Sight Vengeance, so the attacker isn't looking long enough to burn their retinas. It also kicks in before a defensive entangler (such as a Vine Shield) or a mind-sliming power can possibly interrupt the attack.
Awe is different from the four attack-interrupting traits mentioned above, in that it goes against the Morale of the attacker. The others go against Magic Resistance. Of the four, only Petrification and the Vine Shield ability also completely prevent the attack from happening.
Awe has a variable point value to it, such as +1 (via the Bless) or +3 (such as on a common Dryad of Pangaea). This is added to 10, forming the difficulty of the Morale check the fellow has to pass to succeed. If the fellow fails, their attack attempt for that combat round is wasted. It should be noted that this is an individual Morale roll, and not a squad Morale roll like what Fear goes against.
Those who are "awed" flash white, in case you're wondering (while watching a battle replay) why someone didn't take a swing.
There are lesser forms of Awe, which only affect certain units. But who is affected by which types?
In previous games, the only sources of Awe were items and the Awe Bless. Now the Bless is tougher to acquire (requiring 62), but there are more avenues of application.
Magic spells can apply Awe, if the caster has both Glamour and Fire. These are Enchantments that require 11 (for self-application), 21 (for 1-square application), and 31 (for 5-square application), respectively.
Most commanders don't have Awe, even if they're quite skilled. However, a commander who puts on many Leadership-increasing items, and who also has an Inspirational item, may have enough of a bonus to give them a point of Awe or more. ( rates?)
Early Xibalba's Sun Cult gets 1 point of Awe while they can maintain their Global Enchantment, Theft of the Sun.