Ki is not something can be described in a simple definition, however there are very complicated ones elsewhere. A yoga was developed in India that is very similar to what we call Ki in America. This definition is VERY hard to follow. This particular Indian ritual is often done, and power to heal, see far, also see into people bodies, and to accomplish great feats is enabled. There is much yet to be explained, but that is a very short definition in which some vital info has been withdrawn.
The ancient Martial Arts of Japan referred to as Chi Kung is a little closer to what we see in Dragonball Z and GT. It actually came from an ancient art very few could perform. It requires the focusing of mind and body to the point where you can channel energy as you wish. Some masters of Chi could heat their bodies and channel heat waves through their hands to catch fire to objects. Sound familiar?
However the Ki in Dragonball Z/GT is still a little different. It is described as energy within that must be channeled through the body and formed in what we call Ki or the so called "energy" as it is called in the dubbed versions of Dragonball Z on cartoon network. Many people confuse Ki with power level. This can be understandable because the stronger you get the better your Ki blasts and so forth. Energy and power level are somewhat linked though, because if a character were to get hit, his power level would decrease and his energy within would be hindered. The best way to understand it is to think of it as different categories. If you are weak in one category the other may fail to produce correctly.
In America we call the practice of focusing energy Ki. It is mainly used for healing. Many people don't know that there are similar practices all throughout the world. The people of India use Kia. The Japanese use Chi Kung as mentioned above. The Chinese use Qi Gong and Tai-Chi. We can never be sure if any of this is "real". We only have myths and legends to go on.