Torchlight 1.12 Patch Notes
Each vendor has their own DRM solution, and none are compatible. If you purchased from Steam, you'll need the Steam patch , and so on.
This if a full reinstallation. The packaged files for the patch changed entirely to improve loading times, so a full reinstall is necessary.
If you are patching, you'll need to uninstall your previous version.
This is a whole new patch 1.12 for torchlight that should improve gameplay dramatically, continue to read the full patch notes.