Poison is one of the three types of magical damage. It comes in many forms.
There is the poisoned status which leader to a player or monster gaining damage slowly every 2 seconds. It continues for a while and the amount of damage per 2 seconds reduces in time untill the poison stops. An example of how it might go follows: 3, 3, 3, 2, 2, 2, 2, 2, 2, 1, 1, 1, 1, 1, 1, 1, 1
1) The poison status can be obtained by running through a poison field which can be permanent (a map poison field placed there by CIP), or by running through a created poison field (shot by a giant spider, created with the spell poison field or poison bomb).
2) The status can also be obtained by getting a spark hit from certain creatures that cause poison (such as Giant Spider, Scorpion, ...).
3) A last possibility to get poisoned is by the druid spell Poison Storm or Envenom.
Some creatures (like Beholders, Necromancers, ...) can also shoot little poison-like attacks from a distance. They do not poison you, but they give regular damage.