A method is a function defined inside a class. Its first parameter is always self, the object it was called on, which gives it access to that object's attributes:

class Character:
    def __init__(self, name, health):
        self.name = name
        self.health = health

    def take_damage(self, amount):
        self.health -= amount
        if self.health < 0:
            self.health = 0

    def is_alive(self):
        return self.health > 0

hero = Character("Aria", 30)
hero.take_damage(12)
print(hero.health, hero.is_alive())
hero.take_damage(50)
print(hero.health, hero.is_alive())

When you call hero.take_damage(12), Python passes hero as self and 12 as amount. That is why the definition has one more parameter than the call.

Now the rules about characters live with the characters: health can never go below zero, because the only code that reduces it makes sure of that.