looks like dried plant of Selaginella sps., a lower plant belonging to Lycopodiaceae.
I would also go for Selaginella sp. a couple of years back i was working on the ethnomedicinal plants of Bihar and Jharkhand area and the same plant (genus) is sold there by the name ‘Sanjeevani Booti’.
is it because it plucks up and greens up with rain, ie revives itself, and hence people think it will help them too??? or does it have some restorative properties?