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In 1998, the three known Halliwell sisters (Prue, Piper, and Phoebe Halliwell) move back into their childhood home, Halliwell Manor, after Grams' (Penny Halliwell) funeral. By accident, Phoebe discovers the family's Book of Shadows, (a family heirloom book containing centuries of knowledge, spells, and magic learned or created by the Halliwell matriarchs). Phoebe learns that she and her sisters are the most powerful witches ever to walk the earth; destined to protect both innocents and the world at large from demons, warlocks, and other evil creatures. (Phoebe), reasonably thinking the book is a novelty reads the book's initial inscription - an inscription that also happens to be an incantation which activates the Halliwell "Charmed" powers now that the sisters are back at the manor.
By the end of the first episode, each sister learns that she has a unique power and that they can each cast spells and brew potions. Prue, the eldest, had the power of telekinesis—the ability to move objects with her mind. This later evolved to the point of being able to astral project, or move her astral form outside of her body. Piper, the middle sister, has the power to affect molecules, at first to slow them down until they stop, effectively "freezing" people/objects. As she grows more proficient, she learns how to freeze only certain people or objects or body parts, as she wishes. As her powers grow, she is able to make molecules move so fast they explode. Phoebe, the youngest, initially possesses the power of premonition, which evolves into being able to receive visions of both the future and the past. She later picks up the powers of empathy (the ability to both sense and tap into others' emotions) and, later, levitation.
Prue is killed in the Season 3 finale. While grieving her loss, Piper and Phoebe discover that they have a half-sister - Paige Matthews -(the secret love child of the sisters's witch mother and her Whitelighter Sam). Paige's Whitelighter blood mixes with her witchcraft heritage to give her a form of telekinesis, though she has to verbally call for objects to "orb" them to their intended destination. As she learns to control the dual sides of her ancestry, Paige also learns how to orb herself and others (the Whitelighter form of teleportation), and eventually she receives her own Whitelighter charges to train and protect as they learn witchcraft. Paige, after falling in love with her future husband, develops the ability to heal others with the touch of her hand.
Although each sister is quite powerful in her own right, a sister's powers are enhanced when they are joined together via the Power of Three, said to be the most powerful magical force ever formed. Their powers are rooted in their bond as sisters, and it is their love for each other that makes them so strong.
During the first two seasons, the sisters would face various evil beings from week to week. However, they discover that their true enemy is the Underworld's ruler, the Source of All Evil. The Source is discovered to be behind all the attacks on the sisters and becomes the main villain during Season 4 until he is finally vanquished. After the Source's vanquish, a season long storyline was introduced and a good being/opponent along with it.
On top of the supernatural issues in Charmed, the characters had to contend with serious issues in the day-to-day world of the mortals - such as relationships, careers, marriage, childbirth, illness and the deaths of their loved ones. The sisters also had to fight to prevent the exposure of the existence of magic to the community at large, contending with several police and FBI investigations.