The electron density of an ion is strongly influenced by its environment in a condensed phase. When the environment changes, for example due to thermal motion, non-trivial changes in the electron density, and hence the interionic interactions occur. These interactions give rise to many-body effects in the potential. In order to represent this phenomenon in molecular dynamics (MD) simulations a method has been developed in which the environmentally-induced changes in the ionic properties are represented by extra dynamical variables. These extra variables are handled in an extended Lagrangian formalism by techniques analogous to those used in Car and Parrinello's ab initio MD method. At its simplest level (the polarizable-ion model or PIM) induced dipoles are represented. With the PIM it has proven possible to quantitatively account for numerous properties of divalent metal halides, which had previously been attributed to unspecific "covalent" effects. In the solid-state the prevalence of layered crystal structures is explained. Analogous non-coulombic features in liquid structures, in particular network formation in "strong" liquids like ZnCl₂ , have been studied as has network disruption by "modifiers" like RbCl. This work leads to an understanding of the relationship between the microscopic structure and anomalous peaks ("prepeaks") seen in diffraction data of such materials. The PIM was extended to include induced quadrupoles and their effect studied in simulations of AgCl. In the solid-state it is found that the both are crucial in improving the phonon dispersion curves with respect to experiment. In the liquidstate polarization effects lower the melting point markedly. For oxides the short-range energy has been further partitioned into overlap and rearrangement energies and electronic structure calculations are used to parameterize a model in which the radius of the anion is included as an additional degree of freedom. The Bl → B2 phase transition is studied in MgO and CaO and the differences between the new model and a rigid-ion model are analysed.