The lava contain invisible non-player characters (similar to fishing spots) that periodically throw up lava projectiles, which fly upwards into the air and then land on a random game square nearby. Upon landing they explode and then fade away. If a player is standing within a couple of squares of the landing site, the damage sound effect will be heard, and the player will receive a random amount of damage, ranging from 10 to over 50. This damage does not put the hit player in combat and does not interrupt actions like rest.
It is as of yet unproven whether NPCs are immune to volcanic bombs or not. The only NPC within the reach of volcanic bombs is Simon near the Chaos Temple, who, as a non-attackable character, is already immune to all forms of damage.