Your sight has been hampered, whether you are seeing spots, only able to make out blurry shapes, or completely unable to see. Blinded can never exceed 3 ranks, and ranks from different afflictions do not stack.
You take a -1 Penalty per rank of Blinded to vision-based Perception checks, non-Area attacks that target Reflex & Defense DCs, Defense & Reflex saves, and DEX- & STR-based skill checks and attacks that rely in any way on sight.
At Blinded 2 or 3, you are constantly Flat-Footed against any attacks or effects that you cannot sense with a Precise Sense other than vision.
At Blinded 3, you cannot see at all, and take Disadvantage on all rolls that are affected by the Penalty imposed by the Blinded condition.