No classic targeting. You will not be able to "target an enemy" and then have your damage spells automatically shoot at his position.
You aim your spells manually, by rotating your character around, and when you shoot a spell, lets say fireball, your fireball will fly in that direction. If it is a ground targeted spell, then you will target some spot on the ground and your spell will fly to that location. That location may or may not still contain enemy player or mob.
Physical, melee attacks are swings aimed at direction your character is facing, they are usually cleaves, and whoever is in front gets damaged.