When is it okay to steal?

You can loot fallen enemies, but everything apart from that will damage your karma. From what I figure though its only if its in plain sight.

We can swipe things using get, including torches right off the walls. While "Borrowing!" can lower karma, for some strange reason stealing torches is immune from this effect, so I'm going to steal absolutely every torch in Britannia because I can. It also seems taking items found by searching doesn't count as stealing, though taking things from plain sight or swiping food off tables (yes, food is placed on tables and yes, you can steal it) does lower our "Karma."

Source

There is also a bug:

In the pub of Empath Abbey are provisions where the programmers have forgotten to apply a "other people's stuff"-tag. Meaning: you can take them and it's not stealing. Climbing then up and and down the ladder exploits another bug, as the food will re-appear. This means without paying or karma-loss you can get lots of food.