Principal means the chief or most important thing.
It can be used to denote the largest thing in a group - for instance,
Vancouver might be called the principal city of
British Columbia, even though the smaller
Victoria is the capital.
In a
school, the principal is the chief
administrator, in charge of running things. In a company, a principal is one of the head administrators as well, though the term is often used to denote one of the managing partners or
founders or someone holding an equivalent position in a
corporation - usually someone heavily invested in the company.
Finally, in a
loan or a
bond, the principal is the original amount loaned, as distinguised from the amount paid in
interest.