Indeed.
All you have to do is enchant 5 items with an Invisibility or Chameleon spell at the Arcane University (each item gives you 20% for a total of 100%). At that point you're basically God. You can steal from, kill, or beat anyone in the game and they can't fight back. It almost makes the game not fun though when you use it permanently, so I put them on and off depending on what I'm doing.
I never understood that whole part of the game.