There are three alignments in Dungeons & Dragons. The quoted material on this page is copyright 1983 by TSR, Inc., and used without permission under a fair use rationale.
Law (or Lawful) is the belief that everything should follow an order, and that obeying rules is the natural way of life. Lawful creatures will try to tell the truth, obey laws, and care about all living things. Lawful characters always try to keep their promises. They will try to obey laws as long as such laws are fair and just. If a choice must be made between the benefit of a group or an individual, a Lawful character will usually choose the group. Sometimes individual freedoms must be given up for the good of the group. Lawful characters and monsters often act in predictable ways.
Chaos (or Chaotic) is the opposite of Law. It is the belief that life is random, and that chance and luck rule the world. Everything happens by accident and nothing can be predicted. Laws are made to be broken, as long as a person can get away with it. It is not important to keep promises, and lying and telling the truth are both useful. To a Chaotic creature, the individual is the most important of all things. Selfishness is the normal way of life, and the group is not important. Chaotics often act on sudden desires and whims. They cannot be trusted, their behavior is hard to predict. They have strong belief in the power of luck.
Neutrality (or Neutral) is the belief that the world is a balance between Law and Chaos. It is important that neither side get too much power and upset this balance. The individual is important, but so is the group; the two sides must work together. A Neutral character is most interested in personal survival. Such characters believe in their own wits and abilities rather than luck. They tend to return the treatment they receive from others. Neutral characters will join a party if they think it is in their own best interest, but will not be overly helpful unless there is some sort of profit in it.
In Glantri, most people are Neutral. Though they may pray to the gods of Law, they have little interest in matters of theology and seek primarily to live their own lives rather than worry about the balance of cosmic forces.
Some folk do tend toward Law. The gods of Law are generally deemed benevolent, and the scars of war and of Chaos magic still afflict both the land and the hearts of the older generation. Many are willing to sacrifice a measure of freedom for protection from further disorder.
And then there are those who dedicate themselves, consciously or instinctively, to the precepts of Chaos. In the wake of disaster, it's easy to see the world as a place ruled by random chance and ill fate. Why not ride the wave of Chaos for your own advantage?
In the Black Peaks
In the Black Peaks, Lawful is the best alignment because after the horrific destruction of the Dragon Army, peasant rebellions, and banditry, people need a stable social order on which to rebuild their lives.
Alternatively, Chaotic is the best alignment because it squarely confronts the fact that life isn't fair, and Lord Stefan's feudal system is a repressive system of serfdom and exploitation. Life is all too short, and no one is going to do you any favors. If you want anything in this world, you've got to stand up for yourself and take it, and if that upsets the city fathers, with their fancy robes and monocles, well then they shouldn't have gotten in the way.
As a third option, Neutral is the best alignment because it avoids the authoritarian tendencies of Law, without the grasping self-centeredness of Chaos. It's a compromise position that shuns the big conflicts of the age in favor of making it through another day.