Hit Points are a measurement of the amount of damage a unit can suffer before being killed. They are commonly referred to as Life, HP, or Health.
During a battle, an attacking stack of units subract their modified attack power from a stack of enemy units' hit points. The amount of units killed in an attack is the damage dealt divided by the hit points of a unit within that stack. A partially damaged unit's current hit points is tracked throughout the battle, but healed to full at the battle's end.
For example, a flight of Chimera inflict 4830 points of damage onto a stack of Faerie Dragons. Faerie Dragons each have 60 hit points, therefore, 80 are killed (4830/60 = 80). One remaining Faerie Dragon unit is reduced to 30 hit points, absorbing the remainer of the damage.
There are various Hit Points Modifiers that can increase or decrease a unit's hit points before a battle. During a battle, Healing and Steal Life can help units recover damage taken during the fight, reviving or creating new units.