The combat system is actually a bit more complicated than you'd first expect. It reminds me of this turn based strategy game on the GBA where you attacked something with a minigame where you had to manuver your crosshairs over a bullseye on a moving target. Zone of Enders I think.

Basically you have 3 different modes of fire. Lock, Close, and Targeted. Your crosshairs also change size by growing larger if you move and smaller if you take a prepared position.

Lock is where you use the provided 'lock on' feature in the game. Its a way to simplify matters for people without FPS aiming skills. In a general sense its a 'point in general direction and shoot' mode. You have a decent chance of hitting and a decent chance of missing/glancing your target. Where you put your mouse is completely unimportant because you will be pointed in the general direction of where you are locked.

Close is where you ignore the auto-lock and start to use your FPS skills. There's a small area around the 'target' marker (which is a crosshair on the mob) where as long as your mouse is in that area you will shoot at that mob. In short its a 'point at enemy and shoot' mode. You get a slight bonus to hit and glance and your chance to miss goes down dramatically.

Targeted is where you hone your close target and actually put your mouse over the crosshair icon. The closer you get to the bullseye the higher your crit chance and you will have virtually no miss/glance rate if you can keep a bead on your target's marker. Since mobs sometimes shuffle, roll, and dodge around you're more likely get only occasional chances to make a targeted shot and rely mostly on close shots. In short putting your mouse over the target means you're actually aiming at it.

Your crosshairs adjust depending on your stance and movement. Running and gunning will give you large crosshairs, standing still will give you moderate crosshairs, and kneeling will give you small crosshairs. Basically your crosshairs work like a random number generator. If your large crosshairs is 1000, moderate is 500, and small is 100 then it will pick one point in that range to hit something in that area. So if the target area has a bullseye of 50 and a close range of 200 then with a large target you have a 750-200-50 rate, moderate would be 250-200-50, and small would be 50-50. This is assuming, of course, that you're aiming. So kneeling and making a targeted shot would give you a 50/50 chance of making a bullseye with increased crit chance while standing and making a targeted shot would give you a 50/500 and running around like a chicken with its head cut off a 50/1000.

Of course shotguns are run and gun weapons and unrelated to the aiming system altogether.