When a creature has Concealment, its exact location is obscured (usually by illusion magics or similar effects) but not physically blocked. A Concealed creature gains a defensive bonus, in the form of a chance for all attacks to miss them. This miss chance comes in two amounts, representing how concealed the creature is - 20% (Blur) and 50% (Displacement, Invisibility). To calculate whether an attack misses or not due to concealment, an Attack Roll is made as normal, and if that attack hits, a d100 is rolled. If the roll on the d100 Concealment check is lower than the creature’s concealment, the attack misses.
The 20% concealment can be countered by Improved Precise Shot, but the 50% can not.
Concealment is not Invisibility. While characters are not able to target an invisible creature with spells or weapon attacks (can't pinpoint it), they can attack a concealed creature, just with lower chances for success. On the other hand, characters don't need high Perception or buffs like See Invisibility to pinpoint and attack a concealed creature. Blind Fight, Improved Blind Fight and Greater Blind Fight in melee, or Improved Precise Shot for ranged, help against the concealed creatures by lowering miss chance and rerolling concealment check. To fully counter the concealment effect though an attacker needs a True Seeing buff or Blindsight (natural or from Echolocation spell). In Wrath of the Righteous, Mind Blank will block True Seeing, but there is no way to block Blindsight.