Healing is easy provided you have a Cleric, Paladin, Druid, Ranger, or Illusionist in your group. (Though I don't suggest playing the game with an Illusionist in your group. She's not that good.)

If you forgot to include a healer in your group, simply save your game in Lord British's castle (where you start the game), make a Bobit Cleric, give her 25 Wisdom and add her to your party. Now you're in good shape!

Here's what to do to heal: Since you gain one magic point for each step you take, simply walk around. And as soon as one of your healers (mentioned above) has 10 magic points, use your heal spell. If the enemies are attacking you too often, simply retreat into any town or castle. You gain m.p.'s for being in town, too!!
Also: if you're out of magic points in a dungeon, simply turn left or right over and over. This way you don't encounter enemies, but you do regain magic!!

Here's a trick to avoid taking damage, too: If you want to "stun" difficult enemies in the overworld map of Sosaria, or "stun" difficult town guards BEFORE getting into battle with them, simply check your Status, then take a few steps, and check your Status again. THE ENEMIES CAN'T MOVE OR ATTACK FOR A SHORT AMOUNT OF TIME!! Just be careful!

Good luck!!