The crime system's actually pretty straightforward once you understand the basics. Guards and npcs with high responsibility need to catch you in the act for anything to stick, and when they do you'll see that red hand icon pop up. Most crimes work on a severity scale with murder being the worst followed by stealing high-value stuff, but the guards will chase you down for pretty much anything if they're within about 140 feet.

Once you've got a bounty on your head, every guard in cyrodiil knows about it which can make life pretty difficult. Regular folks might not want to trade with you anymore, though some characters like thieves guild fences don't really care what you've done. When the guards catch up to you, you've got three options - pay the fine and lose your stolen goods, try to fight your way out, or spend some time in jail where you'll lose progress in a couple random skills.

Something interesting, you can actually stash your stolen items somewhere before paying your fine, and if you're working with the thieves guild or dark brotherhood they sometimes help clear your name. Just keep in mind the whole system's designed around risk and reward - sure you might make some good money but get caught and things can get messy pretty quick especially if you've racked up a big bounty.