Does time pass on a Terraria server when no one is present?
Solution 1:
No, time does not pass and world updates do not occur when no players are connected. You can easily verify that by issuing the time command a couple times with no players present — you'll see that the in-game time doesn't change.
You used to be able to keep a world going by just loading it with the server software, but this was changed in patch 1.0.5:
Server
- Servers now hibernate when no players are connected.