The Warlord era, from the death of Yuan Shikai in 1916 to reunification in 1928, was one of the most bitter and fractious periods of turmoil that any country has ever been torn apart into. The scale and amount of the schisms and splits were on a scale rarely seen elsewhere. Entire civil wars in other countries are dwarfed by the struggles of one or two of China's warlords.
The warlords took control when Shikai, broken and depressed at his failure to become Emperor, died. They were essentially officers and generals in his army who then used their military power to take control of a part of the country. The weakest warlords would simply be rulers of a few towns (this was particularly the case in areas such as Sichuan and Guangxi), the strongest ruled dominions that easily outstripped many European nations for size, such as the huge Manchurian domain ruled by Zhang Zuolin.
The warlords of China had a wide variety of different ideologies, backers, and aims, but for most the central thing they wanted was power. This was the fundamental reason the era was so divisive; each warlord was out for himself, and none was powerful or far-sighted enough to be able to unite the country.
The effects of this on China, besides weakness and political disunity, were terrible for the commoners and peasants living under military rule. The need for men to fight the constant wars that were being fought for power, wealth, and land was great; the solution was invariably conscription, and conscription on a grand scale. Thousands upon thousands of barely trained peasants were forced into armies that killed each other with desperate brutality.
As well as suffering for the warlords to gain power, the peasants suffered so they could gain wealth - in the form of high taxes. The overtaxed populace suffered greatly from hunger, and were kept in line by brutal punishments. Beheading was the most common punishment, and even minor crimes could be punishable by death. This repressive attitude was very damaging for the Chinese people.
The need of warlords to find powerful friends if anything strengthened foreign influence in China. Japan, for example, essentially used Manchuria as its proxy, whereas other warlord realms relied more on Europe.
In conclusion, Warlord China damaged the country hugely. The effect on common people was such that it caused great distress and suffering and impeded the country's already much-hampered social and technological progress. It weakened the country beyond breaking point; there would be much death before China had a strong central government once more.