Floo is a flowering plant with magical properties. Floo powder is extracted from the flowers of this plant, as devised by a Medieval witch Ignatia Wildsmith.
Behind the scenes
On Pottermore, it is revealed that a single company, Floo-Pow, was licensed to make Floo Powder in Britain, and that the composition of its product was a "closely guarded secret" no one had managed to figure out. However, it does appear that there have been numerous attempts at creating homemade Floo powder called "Faux floo", which has caused injuries before.