To be "God-touched" is to have the gods in your life in some way, shape, or form. It could be anything from having extremely unusual physical features (ie, violet eyes, naturally blue hair, naturally green skin, etc), or it could be having extraordinary magical abilities such as foresight or the power to move mountains. In rare cases, it could actually mean that a god, such as Mithros or the Graveyard Hag, has taken an interest in you and has "touched" your life. Often, this comes in the form of a personal patron god.
To be god-touched is usually considered a bad thing. Most folk grow uneasy at the thought of a god walking amongst them, and they don't like it when someone exhibits traits that seem god-like or otherworldly - anything strange and unusual, that does not seem within the realm of mortal possibility, can be attributed to being a "god-touched" gift. A popular sentiment amongst the common people and even in the nobility is that "nothing good ever comes from associating with the gods." Such is often true, for while god-touched people may lead extraordinary lives and with - the power to influence the entire world in their hands - accomplish amazing things, their's is often a hard and wearisome life. Part of the reason that Mages and those god-touched are so unpopular is because magic is considered a "Gift of the gods," and while there are many a mage that has done good, far too many Gifted people have abused their powers. In every culture and country of the Eastern and Southern Lands, there are stories of great and evil mages who inflicted unspeakable horrors upon the world with the help of their Gifts. Magic is an uncanny thing, to boot, and those not Gifted are well to fear something that they do not understand.