The battles of the Kingdom Hearts series are based off of a system of Health Points.
Each character and enemy has a number of Health Points that must be depleted before he/she/it is defeated. To deplete Health Points, that character or enemy must be hit by an attack or spell that causes damage. The amount of Health Points taken away with each hit depends on the attacker's strength and the target's defense. A higher defense means that less points are taken away with each hit, and higher strength means that more points are depleted.
Allied characters' health can be seen next to their picture on the Heads Up Display, and enemies' health can be seen on the top of the screen when targeted.
Allied characters' health can be restored via HP orbs, Potions, Hi-Potions, Mega Potions, Elixirs, and Cure Magic. Some enemies have the ability to regenerate their own health, but this is not common.