Hit Points (HP, Health Points, Heart Points, Life Points or Health) are the fraction of the character's Maximum Hit Points stat.
When a character takes damage, which value is positive, the amount of damage taken is subtracted from their current Hit Points that initially are equal to character's Maximum Hit Points.
Once their Hit Points reaches 0, the character will be unable to fight and die.
Hit points can be restored by vaious ways, like by Health Regeneration stat (out of combat), Life Steal, various class or companion powers, and in an emergency by healing potions.
Temporary Hit Points
Temporary Hit Points are special Hit Points gained by various powers, that temporary increase character's Hit Points.
On damage taken, Hit Points are subtracted from Temporary Hit Points first, with the highest priority.
Unlike Hit Points, once Temporary Hit Points are substracted by damage taken, they cannot be restored.