Poison Touch (simply called "Poison" in the game) is one of the many Unit Abilities available in Master of Magic.
With this ability, a unit can make a powerful Special Attack that forces the target to make several consecutive 
Resistance rolls, suffering 
1 point of Damage for each failed roll.
The strength of a Poison Touch ability is noted after its name (e.g. "Poison 4"). This indicates the number of Resistance rolls the target must make for each Poison Touch attack, and thus the maximum amount of Damage that this attack can cause.
Poison Touch is one of the more common Special Attack abilities in the game, possessed by no fewer than 9 units, of which 5 are Fantastic Units, 3 are Normal Units, and one is a Hero.
There is no known way of adding Poison Touch to a unit that does not already possess it.
Description
Whether through bite, sting or weapon, a poison (or, more correctly, "venom") inserted into a living target can cause serious harm. Poisons are chemicals that are designed (whether naturally or artificially) to attack the living tissue that makes up the target's body. Poison essentially disintegrates the target from inside.
Though resistance to poison can be acquired, and is even innate to some species, it is not too common. Most poisonous attacks will likely cause at least some damage to the target. The primary benefit of such an attack, since it attacks from inside one's body, is that poison cannot be stopped by any armor!
Effect
Poison Touch is automatically used whenever the unit engages in Melee combat - whether voluntarily making a Melee Attack against any target, or when Counter Attacking to an enemy assault.
When triggered, Poison Touch makes a single Touch Attack against the target. This attack delivers Poison Damage: it forces the target unit to make a certain number of Resistance rolls. Each failed roll results in 1 point of Damage being inflicted on the target unit. The target does not get to make any 
Defense rolls to avert damage from Poison Touch.
The process is handled thusly:
- The game multiplies the strength of the Poison Touch ability by the number of living
figures in the attacking unit. The result is the "total" strength of the Poison Touch attack. - The target unit makes a number of random rolls equal to the total strength of the Poison Touch attack (see step 1). Each roll results in a number between 1 and 10.
- For each roll that's greater than the target's Resistance score, the target suffers exactly 1 point of Damage.
Thus, the maximum amount of Damage that can be caused to the target is equal to the total strength of the Poison Touch attack. The more Resistance the target has, the less Damage it will suffer, on average.
As a Touch Attack, Poison Touch is executed simultaneously with the exchange of Melee Damage between the attacker and the defender. As a result, both units get to deliver Melee Damage to each other as normal, including any 
figures that are killed off due to any Poison Damage that got through the target's Resistance.
The only exception to this rule occurs when the attacker possesses both Poison Touch and First Strike; in this case, the attack occurs before the target can deliver any of its own Melee Damage or Touch Attacks. Any figures killed by Poison Touch will therefore get no chance to deliver any Melee Damage or Touch Attacks back at their attacker.
Units with Poison Immunity are impervious to Poison Touch. They do not need to make any Resistance rolls, instead completely ignoring the attack. Similarly, any unit that possesses 10 Resistance or higher is also completely immune, since it cannot possibly fail its Resistance rolls.
Conversely, any unit that's had its Resistance score reduced to 0 or less will automatically fail each and every roll, thus suffering the full damage from the Poison Touch attack.
Units with Default Poison Touch
There are exactly 9 units that possesses Poison Touch by default. 3 are Normal Units from different Races, 5 are Fantastic Units, and one is a Hero:
Normal Units
Wyvern Riders - Poison Touch 6
Manticores - Poison Touch 6
Nightblades - Poison Touch 1
Fantastic Units
Chaos Spawn - Poison Touch 4
Ghouls - Poison Touch 1
Giant Spiders - Poison Touch 4
Great Wyrm - Poison Touch 15
Nagas - Poison Touch 4
Heroes
Tumu the Assassin - Poison Touch 5
These are also the only sources of Poison Damage in the game - it cannot be delivered in any other way except a Poison Touch attack.
The Great Wyrm is easily the strongest of the above. With a Poison Touch attack of strength 15, it can cause massive damage to any unit that does not possess a high Resistance score. Wyvern Riders and Manticores come second: while they only have Poison Touch 6, each unit contains 2 figures when uninjured, resulting in a total Poison Touch strength of 12. (The strength of the Poison Touch attack does NOT increase with experience.)
Acquiring Poison Touch
There is no known method of adding Poison Touch to any unit that does not already possess it. Also, since Poison Touch is the only source of Poison Damage, the units listed above are the only units that will ever deliver this type of damage.