Horsepower is one of the ways the power of an engine or overall car is measured. It is a measure of torque efficency over time. Having a lot of horsepower in the low RPM range is good for an engine used for heavy working, like a truck or Earth-moving equipment, and having it in the high RPM range is better for reaching a high top speed (like in a sports car).
A Car With More Horsepower Isn't Always Faster
A vehicle's weight limits a vehicle's acceleration (but not its top speed), and its aerodynamics limit its top speed. Gear ratios in the transmission alter both the acceleration and top speed.
Engine Power Versus Power at the Wheels
Due to drivetrain friction, brake pad drag, and a number of other factors, some of the engine's power doesn't make it to the drive wheels, and how much is lost depends on the vehicle's design and age. There are even other variables, like the air conditioning compressor (on most vehicles, turning on the air conditioning feeds off of engine power, reducing power at the wheels). Reducing the size of the crankshaft pulley reduces the amount of power drain all the components driven by the serpentine belt have, increasing power at the wheels without affecting engine power.