As an ethics thought experiment, Black and White consists of a normative component in which certain actions are predefined as "bad" or "good", and change the player's alignment as good or evil god accordingly. This alignment then directly influences the world simulation, as villagers react differently towards good gods and evil gods. Although this is basically broadcasting the internal moral score to the villagers, it's not particularly unrealistic, since the game takes place at a large enough scale that it's plausible an evil god will be pretty widely known by her villagers to be evil.
Interestingly, the focus is actually squarely on this interaction between the god and her villagers, mediated by her current moral status, not on the built-in normative ethics that is more or less assumed: Rather than the player being led to consider whether a particular action really was good or evil (though this may occasionally happen), the player much more often is led to consider how and why the villagers react to a good versus evil god.
The absence of this normative component from much of the meaningful play of the game is partly due to the moral tradeoffs themselves being mostly along fairly standard lines: An evil god commands fear, can get things done on command, and generally finds things more expedient. A benevolent god has more subtle advantages, such as more loyal villagers. In this respect the benefits and disadvantages of good and evil are more or less analogous to those of, say, white versus black wizards in numerous fantasy settings, and so are readily accepted by players. Not all individual choices are quite as obvious as others, though, and in any case this simplistic setup fits fairly well (in my opinion) with the rest of the game's humorous tone and generally abstracted gameplay.
Indeed some reviewers, notably a gushing one at Salon, found it a compelling sandbox simulation of god's-eye-view decision-making, and opined that the representational aspects of the game were wildly successful:
...Black & White is a kind of ethics simulator, showing you the sum of your character and the consequences of your actions, physically imprinted on the shape of your world.
[T]hough the title suggests otherwise, the game doesn't simply plunge you into a clear-cut sense of moral choices. Because this is morality on a godlike scale. Early on in the game, for example, you're presented with the pleas of some incompetent shipbuilders, who beg you to help them complete their ship.
From a human perspective, their constant requests soon get annoying. But from the god's-eye view, your alternatives are ambiguous. Assuming a Christian/humanist perspective, perhaps, you should refrain from helping too much, begging off on the principle that the Lord helps those who etc. But from a more Greco-Roman point of view, you kind of want to get pissy, and hurl a few boulders at their ship.
The decisions get substantially more complex when you're given the most impressive feature in the game: your own Creature, a giant-size emissary that takes the form of various animals. ... You get the creature in its infancy, a gurgling, playful tabula rasa; making him grow into a worthwhile pet and servant requires training and a scrupulous regimen of punishment and reward.
Whether one agrees or not with this evaluation of Black and White, or with the suggestion that players find themselves contemplating things like the differences between Christian morality and Greco-Roman morality as a result of playing the game, it's interesting that this reviewer finds compelling precisely this sort of ethical representation, and is ecstatic at his perception that this game embodies it.
To a much greater extent than Black and White, Fable's moral system is representationally quite strange. Characters the player encounters act differently depending on her centrally compiled and instantly updated moral score, but unlike in Black and White, there doesn't appear to be much of a plausible explanation for this: Killing an innocent person in one village will, just several minutes later, make people in another village regard the player as more evil than previously. This "morality meter on the forehead" representation is hard to interpret as an abstraction of social dynamics; perhaps if it were over a longer period we could interpret it as the player building a good or evil reputation, but it happens on such small timescales and in response to such individually detailed events that it really seems bizarre.
In addition, Fable seems to imply a strictly utilitarian model of ethics, where different actions are good or bad in different degrees, and total goodness is the sum of these separate goodness values—and even more strongly to imply that everyone in the world actually views morality that way, and so will treat you based on your accumulated total moral score, treating you as a good person even if everything they've seen you do in the last 20 minutes is horrible. If all these implications about the moral system were merely problems on a conceptual level, but made for a compelling and interesting game, that would be an acceptable tradeoff, but it's unclear what this style of morality simulation buys at all, apart from being relatively simple to implement.
The morality itself is mostly along similar lines as that in Black and White, in being classic and simple: killing innocent people is bad, saving people is good, and so on. Its effects are also broadly similar, as being evil can be expedient, but being good has subtler benefits. However, while Black and White seemed to work well with these abstracted morals, in the RPG setting, especially combined with the unrealistic propagation of moral reputation, this seems to work less well: reviews have called it a "stripped-down ethics system" where "decisions are so ethically basic that they're not at all difficult to make". The latter review did add, however, that "it's still interesting to see how the game plays out depending on what you do", perhaps suggesting that there's enough interest in this sort of thing that even a bad bit of moral calculus is better than no morals at all.