Mana is the power behind all magic in Tibia. Every spell that is cast requires mana to be effective (except house spells). Mana is also required to create runes, and in some cases, mana is required to use runes.
Mana is regained over time, when you eat any kind of food, or by using some special items, like mana potion. See the page on Regeneration and the pages for each vocation (Knight, Paladin, Druid, Sorcerer) for more information on mana regeneration.