In Adom, PP stands for Power Points. It reflects the amount magical energy currently residing within a character, waiting to be used to fuel magical spells or other abilities. It is primarily affected by character level and the Mana stat, presumably also the class of the player. Max PP can be modified independently of its base attributes by certain effects, such as the mana battery corruption.
Casting from HP
While magical class powers tend to require actual PP to work with, and mindcraft will only work with PP, regular spells can be cast using HP. Simply try to cast the spell as normal. If you do not have enough PP to cast it the game will ask if you want to cast the spell anyway. It will then drain HP equal to the amount of PP missing, divided by two, rounded up; in other words, each point of HP is worth 2 PP. Using this method to cast spells will however abuse the Mana stat, leading to possible reductions of the Mana stat and subsequently max PP score. This gives a heavy incentive to use only PP to cast spells except in emergencies, apart from the fact that losing HP to spellcasting might of course contribute to the PC's death as well (but often not as much as letting a particular monster live).