Health is the amount of Damage an Invader or Dahan can take before it is Destroyed.
When Towns, Dahan or Cities take just 1 damage, flip them over to the damaged side. If a City take a second damage, put an Energy Marker by it to note that it has taken another damage.
During Time Passes, all damage goes away, so remove any Energy Markers indicating damage and flip over any damaged Towns and Cities.