Most MMOs you may have played are Theme Park games. If you've played World of Warcraft, Age of Conan, RIFT, Tera, Neverwinter, Warhammer or any of their similar competitors, you've played a Theme Park MMO. In those games you spend most of your time interacting with the environment - going on quests, running dungeons and raiding. Most of the content you are exposed to is scripted and the best way to progress is to figure out the optimal solution in terms of tactics and gear and character builds and repeat the content as you grind for XP and gear upgrades.
There is another kind of MMO. The Sandbox. Ultima Online was a sandbox. EVE Online is a sandbox. Pathfinder Online will be a sandbox. Sandbox games are designed to generate experiences through "emergence" - the kinds of things that happen when players are given tools that allow them to interact with each other and with the world. Sandbox games still usually have some environment content but it's usually provided as a way to give some structure to the game and provide players with some objectives to pursue until they become more integrated into the game's community.
Sometimes people confuse the term "Open World" with "Sandbox". An Open World game allows your character to roam relatively freely without a lot of restrictions on exploration. Most Theme Parks are Open World games. A Closed World game would be like Last of Us - you can move around the current scene, but you really don't have the freedom to explore the whole world.
The difference between an Open World Theme Park and an Open World Sandbox is Persistence. In most Theme Park games the characters can't make a meaningful impact on the game world. No matter how many times they take the quest from the old man in the inn, the dragon still terrorizes the town. Almost all the buildings in the world were put there by the designers and the players can't change anything about them (except occasionally the interior of their own "house"). The territories in the game are defined by the NPCs who rule them - and thus by the designers who created them. You might be able to craft a lot of gear but the best gear, the stuff the players really desire, is loot obtained by killing monsters or grinding a game system like a battleground.
Sandbox games are all about Persistence. Many of the structures in the game are built by player characters. They may reflect the choices of the players as well, creating lots of variation in architecture. The territories in the game are often defined by conflict between large groups of players - and the struggle to take and defend those territories becomes a crucial part of the game experience. Typically these games also feature a robust crafting and economic system where many, if not most, of the items players desire to acquire are created by player characters and exchanged on markets that reflect supply and demand.
It all comes down to "Agency". Do the players determine the most important aspects of the world, or do the developers? In a sandbox game the objective is to empower the players to take the leading roles, to be the Agents that create the total experience through their interactions, through their play, and through the persistent results of their actions.
That's our goal for Pathfinder Online, to maximize meaningful human interaction!