The End Powder is used for item enhancement, as it can give special effects to items, or improve them in another way.
The primary source of End Powder is the End Powder Ore, which is commonly found across the entire End dimension.
Natural occurence Edit
Quite often, the Dungeon Towers will have several pieces of End Powder in their loot chests.
As said earlier, the End Powder is mostly used for item enhancements. At this moment, you can add various enhancements to Ender Pearls, Transference Gems and Soul Charms. The powder is also a requirement for the Enhanced Brewing Stand in order to create high tiers of potions which cannot be normally brewed in vanilla, and a different type of use (other than enhancing) would be healing Death Flowers in order to prevent them from dying.