On "Cheating"

There are a myriad ways of form to cheat in any game but what can the designer do about it?

Sure, he can curse and scream and ban offending players from the game. That's always an option. Granted, identifying cheaters and banning them could be a prohibitively hard thing to enforce. This is especially prevalent in online multiplayer games since interactions between players can intensify any possible motivations to cheat in the first place.

A clever designer will be able to add enough disincentives to cheating that their numbers can be curbed to the extent where cursing, screaming and banning players becomes a tractable solution for taking care of the rest.

Cheating #1: Illegal duplication of rare items

Duplication of rare items typically occurs when there is a powerful or highly desire-able item and supply cannot meet demand. This is usually the case for almost all powerful items since everyone wants the "best" items and weapons and armors.

In this case, common disincentives to this is..

Break the market/Soulbinding

Make extremely powerful items only usable by the account or person who found it. Then you can make a second tier of less powerful and less desirable items and have those trade-able and "common' removing the incentive to cheat/duplicate items.

Infinite Supply

Simply make extremely powerful items common so that everyone can have "the best" gear. Then you can focus on the rest of the game

Cheating #2: Automated Play

Automated playing or "botting" is a way where clickers and automated tools play the game for the character instead of players themselves. This is a form of cheating where the time investment by players who do use automated tools can be several times greater than the actual players themselves.

Allow Automated Play using In-Game tools / Or automated gains while offline.

You can, in effect, cancel a large portion of 3rd party automated tools by simply allow automated play in-game. Give the players a bot system in game or a way of acquiring experience and resources by being offline.  In this manner, automated play becomes less of a chore.

Make Automated Play suck

That is, a large portion of the incentive to do automated play stems from the fact that the most rewarding thing to do in the game is also the most boring. Kill the same monsters 99,000 times. If you take away the benefit from the boring same monster stuff and put the benefits somewhere else (like say, completing quests with random objectives or complicated movement puzzles/questions), then there is essentially no gain in using automated play tools.

Cheating #3: Maphack

If your game has some sort of random generation feature, a maphack tool can be extremely powerful. Consider the most famous example, Diablo 2, where maphack was used by a huge portion of the player base. Usually maphack usage arises due to the frustration between horribly designed random levels, the neccessity to get to one place from another with speed and the incentive to go somewhere fast.

Re-evaluate your network protocol

You can make maphack impossible by checking your network protocol very carefully and ensuring that the player can't have access to more of the map than he is allowed. 

Re-evaluate your random generation

Part of the reasons map hacks are used are because your random levels don't make any sense. Why should the player bother stumbling through a thousand dead ends? Having clear signals and paths for players who want to get to one place from another instead of stumbling through random garbage is a great disincentive to maphack because you don't need it.

Re-evaluate why players keep going from one place to another.

If players are constantly trying to go to one place from another, you might want to ask yourself why they won't explore the immediate surroundings. If players are in such a rush, perhaps demotivating the players from getting there (lowering the benefits of being in that area) or increasing the benefits from carefully exploring is a better fit.