Physical damage is one of the five damage types. It is the most common and the only one reduced by armour, rather than by a resistance. Most physical damage comes from weapon attacks, but some spells deal physical damage as well.
Every 10 points of strength give a 2% bonus to physical damage from melee attacks. The Iron Grip keystone passive extends this bonus to also apply to physical damage from projectiles. The Module Error: No skills found with q_where = skill.active_skill_name="Iron Grip" gem applies the same effect to a single skill.
Skill gems
Skills with the attack keyword will do any physical damage of the weapon used and apply the appropriate physical damage passive skills. Some spells also deal physical damage.
A list of skill gems with the spell gem tag that deal physical damage:
Template:SMW item table/skill gems
Unique items
Global flat added physical damage
Unique items that have global flat increases to physical damage.
Increased physical damage
Unique items that increase or decrease physical damage by a percentage.
Add a percentage of physical damage as another damage type
Unique items that add a percentage of the physical damage as another damage type.
Converted to another damage type
Unique items that convert physical damage to another damage type.
Passive skills
Many passive skills throughout the tree increase physical damage, but most are restricted to particular sources. Passives exist to increase physical damage from the following sources:
All of these categories of passive skills will only increase the physical damage of attacks, not spells. Passives which increase projectile damage, and the Module Error: No skills found with q_where = skill.active_skill_name="Iron Will" support gem, apply their bonuses to all types of damage, not just physical.
Physical damage
These passive skills grant unrestricted physical damage bonuses. This includes physical damage generated by spells such as 
Ethereal Knives and 
Shockwave Totem.
Template:Passive table