Guild Wars 2

Does it exist, and if it does how does it work?

I remember reading that might stacking is more beneficial to characters with low power (or cond damage) since it would scale better.

Does that also apply to the other stats, like precision (and soon ferocity)?

It might be more beneficial in relative terms, as someone with low Power might be able to double their effective Power by stacking Might while someone with already high Power would see a relatively smaller increase.

In absolute terms however they are identical. There are no diminishing returns in GW2 afaik, aside from maybe Toughness.

As far as I know, there is no soft or hard cap on any stats. You can go as high as gear/traits/food/boons will let you.

There are diminishing returns on weapon power when in downscaled areas. For example, if you take a level 80 exotic weapon into a level 30 zone, its power will get truncated to a level 80 rare and then downscaled (you can verify this by swapping between an 80 exotic and 80 rare and seeing your (attack – power) not changing).