"Physics: the science of matter and energy and their interactions" (WolfRam Alpha via Siri).
That's exactly what these games are, but instead of real-world matter it's virtual-matter.
What makes them so amazing is that objects in the game can be manipulated or collided with using your fingers.
The most popular physics-based game is Angry Birds. You fling a bird (with a slingshot) and knock into objects which react to the angle and momentum of the flung bird according to physics-based calculations. Others include manipulating a block of wood and a rope (Zen Bound) or drawing objects which you can then use in the game.
We LOVE these kinds of Apps. Manipulating objects in a digital world and seeing how they interact is fascinating.
iPad's touch screen and high-resolution graphics make playing Physics Games amazing.