if you are hosting the server, definitly backup the world too

UPDATE: Seems like steam cloud is doing its job, everything was backed up by steam.

Note: Your character stats & inventory are saved local only. Suppose you were playing on the server I run. If you wipe your computer then reconnect, you'll start "naked" with no skills, but everything NOT on your character will be there just fine, as if you connected with a new character.

Along that same line, if I wiped my server or you connected with your advanced character on another server (or you cheated advanced gear and stats on a local game), you'll bring all that in while the server you connect to will not care at all how you got your stuff: you just go right on in.

Originally posted by Fzanco:

It's all saved server side. I was able to install on another computer and pick my game with no interruptions

Originally posted by Aldo:

Everything is local.... back up your files
https://www.ign.com/wikis/valheim/How_to_Back_Up_Your_Save_Data

Yes and no.
Valheim indeed keep its save files at the Steam Cloud, but I'm not sure how exactly rules for cloud save restoration work.
While it is advised to backup anyway, I'd say some of your saves are definitely held at the Steam Cloud.

To clarify I and my friend have only played on maps we created and both of us have uninstalled and reinstalled, changed computer and everything was still there. All map and toon files were installed via steam

It's all saved server side. I was able to install on another computer and pick my game with no interruptions

Everything is local.... back up your files
https://www.ign.com/wikis/valheim/How_to_Back_Up_Your_Save_Data