I'd suggest that it's both. Certainly an ideal state that represents optimal conditions associated with absence of maladies or insults. But also more pragmatically, a range of conditions that allow for good to only reasonable health. It seems that interventions (be they individual medical or public health in nature) seek to address or prevent the maladies and insults, assuming that this represents a pathway to the ideal. Promotion of the ideal is often more of a philosophical stance - clean mind, clean body, etc. Anyway, it's an interesting question, Muneeb!
The WHO definition seems very broad - 'a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.' But a really interesting view of health is framed in terms of a person's adaptability and flexibility. Canguilhem suggests that a healthy person is one who can tolerate a range of environmental and socioeconomic impacts. That's something that doesn't feature in the WHO definition.
Health as a perception has historically changed subject to outside influences. In Europe paradigms of health emerged from the state. It was a paradox of rule, in that the king (mainly here France and England-not then the UK) was the body of the state and politically likely to grow ill and perish. A diseased state was seen as a genuine prospect, often associated with corruption or at times incompetence.
When his/her subjects were recognised as contributors to and members of the state (appendages in effect) their health became symbolic of the state. Gradually individuals health took on momentum. Once therefore the individual's body was invested with symbolic consequence, health became a factor in the state, part of its responsibility of rule.