Damage Reduction vs Damage Resistance

Those are not reducing damage you take they reduce the damage an enemy does. Or does it work same as for the other abilities?

From my understanding, damage reduction as an attribute doesn't exist. It's just a generalised tooltip term meaning damage reduction from either defense or resistance. What those abilities/passives do is call on stat_damage_bonus_all (if applied to an enemy) and stat_damage_resistance_all (if applied to an ally). And those stats call on typed damage/resistances (physical and elemental).

Defense and resistance are the two reductions that matter in this context, and they should be multiplicative. The end formulas are:
damage = damage * ((100 - resistance) / 100)
damage = damage * ((100 - defense) / 100)

A simplified example using an incoming elemental attack of 1000 damage and a Templar with 80% magic defense and 10% resistance to all elemental damage, accounting for the 5% plus/minus damage randomisation just for kicks:
1000 * 0.9 * 0.2 = 180 * 0.95-1.05 = 171-189

Seems accurate enough, right?

Some additional weirdness with this: Turn the Blade actually increases defense, not resistance, making it useless with maxed defenses, and the Necromancer's Ice Armor doesn't look like it does anything except add 3 Willpower... This game is a mess.

Thanks for the welcome.

But yeah, they become quite negligible. The ones that increase resistances still serve a purpose, so it's not all bad and tonics are still good.