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Paññā: 'understanding, knowledge, understanding, insight', comprises a very wide field. The specific Buddhist knowledge or understanding, however, as part of The Noble Eightfold Middle Path magga to deliverance, is insight Vipassana, i.e. that intuitive knowledge which brings about the 4 stages of Nobility and the realization of Nibbana see: ariya-puggala and which consists in the penetration of the impermanency anicca, misery dukkha see: sacca and impersonality anattā of all forms of existence. Further details, see: under tilakkhana.
With regard to the condition of its arising one distinguishes 3 kinds of knowledge knowledge based on thinking cintā-mayā-paññā knowledge based on learning suta-mayā-paññā knowledge based on mental development bhāvanā -mayā-paññā D. 33.
'Based on thinking' is that knowledge which one has accquired through one's own thinking, without having learnt it from others. 'Based on learning' is that knowledge which one has heard from others and thus acquired through learning. 'Based on mental development' is that knowledge which one has acquired through mental development in this or that way, and which has reached the stage of full concentration; appanā Vis.M XIV.
Wisdom is one of the 5 mental abilities see: bala one of the 3 kinds of training sikkhā, and one of the perfections see: pāramī For further details, see: vipassanā and the detailed exposition in Vis.M XIV, 1-32.
Maha Thera Nyanatiloka. Manual of Buddhist Terms and Doctrines, Buddhist Publication Society, first edition 1952.