{error 'message'} calls padError() - the same function the engine uses for its own errors - from a template. What happens next is up to $padErrorAction in _config/config.php:

• pad (the default): the request ends with status 500 and the error report - the message, where in the template it stands, the stack - for a local request; any other visitor gets the request id, or the application's _errors/500.pad, while the report is logged.
• stop and exit: the request ends with status 500, without the report page.
• dump: the full dump is written to DATA/dumps/ and the error logged; the page goes on.
• log: the error is logged and the page goes on; ignore: the page goes on and nothing is logged.
• boot and php: the boot handler, or PHP's own exception handling, takes over.

In every case the application's _events/error.php hook runs first, with $error, $file and $line. When the request survives, the tag itself renders nothing: padError() returns FALSE.

Use it to stop on a state a page must never reach - an unknown value in a {case}, a required row that is not there. For a check that only test runs should hold the page to, use {assert}; to end the request quietly, {exit}; to throw a real PHP exception instead, {exception}.