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THE HIDE ACTION
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General rules...
* The Hide action implies positioning behind something and holding still. The Stealth (Dexterity) roll detemines how effective the Hide action was done to avoid being notices (roll vs. observer's Perception).
* Being hidden is defined as "Your opponent either doesn't know that you are there, doesn't pay any attention to you, or doesn't know where exactly you are located."
* You must be unobserved for at least one round to do the Hide action. (Ending a move in an obscured space is not enough; enemies simply can figure out where you went. Starting and ending a round without being seen is usually needed for the Hide action.)
* Attack rolls against a hidden creature have disadvantage, and the hiding's creature's attack rolls have advantage.
* If there are observers present, making an attack or casting a spell automatically spoils being hidden, no Perception check needed. (Exception: Skulker feat protects being hidden if attack misses.)
* Distracted characters or creatures may allow for Hide actions with less restrictive conditions, per the DM's call.
* Remember darkvision treats dim light as bright light, and darkness as dim light.
* If you are hidden before the first round of combat you can surprise your opponents and get a free round to attack them before they can react. (You are no longer hidden after you attack, unless you have the Skulker feat and miss.)
* On all attacks against you, the attacker must first identify where he thinks you are located. The attack will automatically miss if you are not in that 5 foot area. If you are in that area, the attack is made with disadvantage on the attack roll. The DM should require a roll with disadvantage, even if you are not in the targeted area and simply tell the attacker that his attack missed.
* If you are hidden, you make attacks with advantage. However, you will no longer be hidden if the attack hits or misses (again, except for the Skulker feat that allowing hiding to continue if attack misses).

OBSERVED AREA
* Enemies can see you and are actively watching you.
* Creatures in combat can be assumed to be actively watching everything in range of sight.
* You cannot hide while being watched.

VISIBLE AREA
* Bright light, open area with obvious normal obstructions (towns, marketplaces, ruins), weather visibility beyond at least a half mile (2,600+ feet).
* Not suitable for hiding. However, attempts to hide may be an Action if described in some detail by a player (character gets into a barrel, crawls under collapsed building rumble, or so forth).
* Your Stealth check (normal roll) vs. observers' passive Perception, or active Investigation roll if observers are searching the area. (DM may grant either side advantage depending on amount of places available to hide.)

LIGHTLY OBSCURED AREA
* Examples include dim light (dawn/dusk/full moon), patchy fog (visibility of a half mile or less) or moderate foliage (summer leaves in a tree).
* Generally not suitable for hiding unless you are a wood elf in natural surroundings (see Mask of the Wild below) or if you have the Skulker feat.
* Observers suffer disadvantage on Perception checks (or suffer -5 penalty on passive Perception).

HEAVILY OBSCURED AREA
* Examples include darkness (new moon/underground), opaque fog (visibility of 300 feet or less), or dense foliage (jungle vines, thick bushes).
* Attempt to hide might not require the Hide action, at DM's judgment.
* Observers automatically fail Perception checks unless the DM rules hearing and smell could compensate (such as having the Acute Hearing or Scent creature abilities).
* If you move from a heavily obscured area to a lightly obscured area, you can try to continue to hide but the creatures you are hiding from get a Wisdom (Perception) check to detect you.

SPECIAL CASES

* Rogues' Cunning Action class feature -- A Hide attempt must follow all the above restrictions, except using a bonus action rather than a full action. A rogue cannot openly attack, move and then Hide if there is no place to be unobserved for one full round. Popping out from a hiding spot to make an attack and then withdrawing back into that same spot means all enemies in combat who had a line of sight on the attack know where the rogue is, so no further Hide checks allowed until moving to a new unseen position. 

* Wood Elf racial trait -- "Mask of the Wild: You can attempt to hide even when you are only lightly obscured by foliage, heavy rain, falling snow, mist, and other natural phenomena." (How is this different from anyone hiding in the woods? Do they get advantage or don't need to take Hide as a full action?)

* Lightfoot Halfling racial trait -- "Naturally Stealthy. You can attempt to hide even when you are obscured only by a creature that is at least one size larger than you." A move to get behind larger creature and the Hide action must be done before the halfing is seen by enemies, else everyone just knows the halfing "is behind the big guy."

* Cloak of Elvenkind: Wisdom (Perception) checks made to see the wearer have disadvantage, and the attuned wearer has advantage on Dexterity (Stealth) checks made to Hide, as the cloak's color shifts to camouflage. Pulling the hood up or down requires an action. (House rule: Adjusting the hood and attempting to Hide can be done with the same Action.)