Blockland features an in-game toggleable physics engine which allows bricks to topple when destroyed. The physics engine also obeys gravity. They will react realisticly with the environment, but will not damage structures which have not also been fake-killed. It is primarily for show. These physics were introduced in Blockland V11.
Vehicle physics allow vehicles to realisticly collide with the environment. It DOES effect the surrounding environment, namely other vehicles. Vehicles also react with gravity.