Any friendly creature is considered an ally, i.e. anything that appears as a green dot or triangle on the minimap. This includes everybody listed in the party window, as well as most friendly animals and NPCs not listed in the party window.
Ally and skill usage
The use of the term "target ally" in skill descriptions means that you may use the skill on any of the aforementioned people unless otherwise stated, which is the case with Blood Ritual.
When a skill such as Dwayna's Kiss uses the term "target other ally", you are allowed to use the skill on any of the aforementioned people, except for yourself.
Ally could mean yourself, a party member, a pet, a NPC accompanying the party (such as Prince Rurik or the Ghostly Hero), a guild battle NPC (such as Guild Lord or Bodyguard), a friendly monster (such as Joe), friendly undead minions, any spirit created by a teammate, or any friendly NPC (such as collectors).
The Party window (P) shows your current team composition under 'Party Members'. Under 'Allies' are listed those allies who are accompanying you for a mission or quest, and your and other party members' pets. Note that the allies listed in the Party window are NOT the only allies you can affect with skills.