The game-concept is similar to "Age of Empires", which is a real-time strategy game. ParaWorld features food, wood, and stone as resources. Food can be picked from bushes, hunted from animals, fished from the sea, or farmed. Stone is located in limited deposits, and wood, cut from trees, is generally scattered throughout a map. Battles can occur on both land and sea.

The story takes place in a parallel dimension, where prehistoric life thrives alongside diverse human civilizations that are not technologically advanced. As a result, dinosaurs take the place of traditional wildlife and livestock, though some of the dinosaurs in-game are highly stylized and not necessarily scientifically accurate. Wild-living dinosaurs can be hunted for food, though some are of dangerous and aggressive species and will attack any player unit that wanders too close. Other prehistoric creatures make an appearance as well, for example woolly mammoths are used where other games might feature elephants.

Players advance through epochs in order to unlock new technologies and upgrades.