Before I try to deconstruct Flying Swordsmen to point out what I think I did right, what I think I did wrong, and what I was sure was a good idea at the time but turned out to be not so good after all, I thought I'd go back and discuss the game I was cloning first.
The game comes in at around 128 pages not counting the adventure module. Despite the length, the rules are VERY cut down from standard AD&D. There's a lot of white space on each page, and a lot of description (or fluff, if you prefer that term). And it's the fluff that really sold me on the game, although the novel mechanics also helped.
So what's Dragon Fist about? It's a game of wuxia action, inspired by Hong Kong cinema. It is class and level based, with Vancian magic, AC and HP, d20 to hit combat, all the basics of D&D. But the theme is mystical ancient China, with martial artist heroes facing off against the soldiers, sorcerers, monsters and demons of the corrupted mad Emperor Jianmin.
What I instantly liked about DF's mechanics was the Stunt Die system. In order to get a bonus from an ability score, you had to choose which ability and roll a die to determine a random bonus. You could only roll one of them each round in combat, so there were trade-offs between better hit/damage (Str), AC/ranged (Dex), temporary hit points and poison saves (Con), a floating bonus to use on any one roll (Int), initiative and magic saving throws (Wis), or reaction rolls and charm saving throws (Cha).
Also, each class (the basic 4 from D&D) had two or three kits that not only allowed you to customize your character a bit, but also were loaded with setting information, as each one represented an organization within the campaign.
Then there were the Martial Arts Maneuvers. These were special abilities (similar to feats in soon to be released 3E) that you could choose as you gained levels to further customize your character. Each, of course, had a colorful name that you could shout out as you used it, just like in the movies!
Setting-wise, the world of Tianguo was only fleshed out at a skeletal level in the first chapter, but the game gave you an appropriate villain to fight (Emperor Jianmin), advice for structuring a campaign that would lead to a face-off with the emperor eventually, and just enough hints to make the game feel like it would be a blast to play through all 10 levels. Well, actually only seven levels, since PCs started at level 3 in order not to suck at first. It's hard to feel like a bad-ass martial arts hero with only one hit die, one special maneuver, and maybe one spell.
Within the game itself, there are some clunky mechanics and some unnecessary hold-outs from AD&D (damage vs. man sized/large opponents, for example). The game gives plenty of wuxia flavor, but for someone who hasn't watched a lot of HK cinema or without much background in Chinese history/culture, the game might not resonate enough for a GM to build up that suggested campaign against Emperor Jianmin.
And the game is high on action, but has no built in mechanics or XP rewards for playing up the human drama side of wuxia. Sure, you could easily build up a campaign arc around trying to find the enemy martial arts master who killed your teacher in a duel or dealing with a jilted lover turned vengeful or seeking to master the secret technique that only your evil older brother knows because he killed the master who taught him, but there's nothing in the game to suggest that you should (rather than just killing monsters or storming the garrison in the next city to get to the magistrate who can lead to the deputy minister who can lead to the minister who can lead to emperor Jianmin).
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