IP stands for Internet Protocol. All computers across the internet are assigned a unique identifier called an IP address. IP addresses are used like street addresses so other computers can locate them. IP addresses are numerical numbers between (and including) 0 and 255, separated by decimal points. For example, an IP Address may look something like: 126.96.36.199.
I suppose this combination of digits can give a maximum number of 4294967296 registered addresses but the address allocation protocols are updated periodically to allow the net to grow. Originally started by American concerns InterNIC Registration Service, currently monitered by the ICANN.