The Magic Stone (also called the Pendant Stone) is an item created by the ancient Pendant civilization to lead its wearer to the soul of the legendary Phoenix. The catch is that only someone with the ancient Tochikan bloodline can operate it.
In the anime series, that person is Holly. She uses it to guide the Searchers to where they think the Phoenix's mystery disc is, but what they don't know is that the stone instead leads them to five monsters who possess pieces of the Phoenix's soul (Tiger, Mocchi, Suezo, Hare, Golem). Lilim seems infatuated with the stone because she happily gives it a big kiss after stealing it
Moo also steals and misuses the stone to find where his ancient body is frozen, and since he possesses Holly's Father's body, he has the bloodline.